Ghost Broking: Don’t Fall Victim to a Fraudster

A deal that looks too good to be true often is. This applies to insurance policies, too. In recent years, there has been an increase in so-called “ghost-broking”, a scam than can have catastrophic consequences, as the victim is left out of pocket and uninsured.

What is a Ghost Broker?

Ghost brokers are unscrupulous individuals pretending to be qualified insurance agents. They typically reach out via social media (particularly, Facebook and Instagram), forums, through acquaintances, or by cold calling their victims, and attract them with the promise of a good deal.

Ghost broking is the name of the tactic used by these scammers.

How do Ghost Brokers operate?

Ghost Brokers usually carry out the fraud by one of three ways:

FORGERY: The fraudster creates fake insurance documents, that look like they come from a reputable insurance company.

FALSIFICATION: The scammer purchases a genuine policy, but falsifies your details to bring the price down. Typically, they will omit previous claims or penalty points, and arrange a policy with the details of a “low-risk” driver. They then amend the documents to include your name, making it look like a real policy.

CANCELLATION: The ghost broker takes out a genuine policy, from a real insurance company, and then cancels it soon after you have paid them, claiming the refund and your money.

If you have purchased a policy from a ghost broker, you are NOT insured.

Whichever way the fraudster created your “insurance cover”, you will be left with no valid cover. Many victims of ghost broking are unaware that they have been scammed until they need to make a claim or get stopped by the police. It is vital to check, if in doubt, and to arrange cover with a reputable provider like Plan Insurance Brokers.

Buying from a fraudster, you could end up:

• Getting points on your driving licence
• Having your vehicle seized and even possibly destroyed
• Being issued a fixed penalty notice
• Being liable for claims costs if involved in an accident

How can you check if your policy is fake?

If you are worried whether you may have bought a fake policy, you should:

• Contact the insurer to check if you have a valid policy with them.
• Check the Motor Insurance Database (MID) – this will, however, only allow you to see whether the vehicle is insured, not if the correct details are attached to the policy (no claims bonus, penalty points etc.).
• Check the Financial Conduct Authority (FCA) register or the British Insurance Brokers’ Association website for a list of all authorised insurance brokers.

Alternatively, if you are worried that you have purchased a fake taxi insurance or motor trade cover, please feel free to call our team, as we will be able to check it for you.

What can you do if you have purchased a fake insurance policy?

If you have purchased a policy from a ghost broker, you are not legally insured and could be prosecuted for driving without insurance. This could cost you your livelihood, as driving uninsured is illegal.

Unfortunately, in the eyes of the law, purchasing a fake policy unknowingly is the same as having no policy. You could face a £300 fine, criminal charges, and your vehicle could be seized or even destroyed.

What’s more, in the event of you being involved in an accident, or should you need to make a claim, you will not be covered.

How to make sure that you buy a genuine insurance policy?

A genuine designer handbag rarely costs pennies. It is the same for insurance policies: trust your instincts! A deal too good to be true often is.

Shop around: if a “provider” offers a policy significantly cheaper than your previous one, or than other quotes from other well-known insurers or brokers, it is likely that it is not a genuine insurance policy.

Be careful if the only way to contact the “broker” is via mobile phone, email or messaging apps – authorised companies will always offer the option of a landline, have a postal address and appear on the Financial Conduct Authority (FCA) register.

The safest way to purchase your insurance via a broker is to check that the provider is a reputable company. Do your research first!

Jon Doherty CII, Sales Manager at Plan Insurance Brokers, says:

Some of our clients have been victims of such fraudsters, unwittingly parting with their money for fraudulent insurance. On occasion, they unfortunately end up with a motoring conviction for driving with no insurance, meaning that the purchase of their next genuine insurance policy is more expensive than it should have been.
Luckily, due to our extensive experience and expertise we are sometimes able to limit the damage of these events. If you are worried about a policy you have purchased, give us a call and we will be happy to check it for you.

Getting caught up in a ghost broking scam could leave you out of pocket, uninsured and even with a criminal record — despite you unknowingly falling victim to a fraudster. Don’t take any chances and stick to a reputable provider.

At Plan Insurance Brokers, we can arrange bespoke cover tailored to your exact need, and secure the right policy for you from our panel of leading insurers. Request a call-back today to get a quote and protect your livelihood.