General Insurance Article - Warning of Ghost Broker car insurance on Social Media

 The warning comes following the arrest at the end of May, of a man by the City of London Police for selling fraudulent car insurance online and targeting NHS workers with discounts.

 Ghost broker is the name given to a scammer who pretends to be a legitimate insurance broker to sell forged or invalid car insurance policies to unsuspecting drivers lured by cheap premiums. In return for the promise of low premiums, ghost brokers ask their victims for an upfront cash payment, which they class as an ‘arrangement fee’. Ghost brokers typically defraud victims in one of three ways:

 Victims are usually unaware they don’t have genuine cover until they submit a claim following an accident or are stopped by the police for driving without insurance. In some cases, ghost brokers also retain the victim’s card details and use these to pay for other victims’ insurance.

 While the police may be sympathetic to victims of ghost brokers, the consequences of buying fake insurance can be the same as driving uninsured. Victims will still be deemed to be driving illegally and left liable for any claims.

 The minimum sanctions for uninsured driving include a £300 fine, six penalty points and, the risk of having your car seized by the police. Newly qualified drivers receiving six penalty points within the first two years of passing their test will have their licence revoked.

 Drivers will also be required to buy a valid policy and may find that they face higher premiums in the future.

 “We’re warning drivers to be extremely suspicious of cheap insurance advertised on social media or websites, especially where the deal on offer looks too good to be true. This is usually because it is. Being aware that criminals are exploiting drivers desperate to save money and, knowing the warning signs of ghost broking scams, can help people from falling victim.

 Lee Griffin concluded, “Criminals prey on peoples’ fears and anxieties during times of crisis, so we’re concerned that the economic downturn caused by the coronavirus creates fertile ground for ghost brokers.

 “There is good new though, drivers can legitimately and safely save money by shopping around for cover. Customers comparing policies and switching using GoCompare Car Insurance could save up to £289 on their premium, without sacrificing their cover1.”

 GoCompare was the first comparison website to join the Insurance Fraud Bureau and, in December 2018, partnered with Featurespace, a globally recognized industry expert in combatting financial crime, to incorporate real time machine-learning to spot anomalies, block new fraud, and recognise genuine customers.