Ghost broking is when fraudsters sell fake insurance policies – specifically motor – and it’s on the rise 1. If you’ve taken out one of these fraudulent policies or a criminal’s been using your details to buy car insurance, it could cost you.
What do ghost brokers do?
First, they need to find people – usually vulnerable groups and young drivers – to buy the fraudulent policies they’re selling. In fact, figures show that drivers aged 17-24 are most likely to fall victim to this type of scam 1.
These fraudsters often advertise their offers – which are likely to be a lot cheaper than real policies – on social media, forums and student message boards 2.
Once they’ve tricked you into thinking they’re legitimate, they’ll often use a combination of the methods below to make you think your car’s insured, even though it’s not.
Create doctored documents
Sometimes, these ghost brokers will sell fake insurance documents for policies which simply don’t exist.
Lie about your details
In some cases, they’ll buy a real policy from a genuine insurer for a cheaper price. But to do so, they’ll provide fake details, such as an incorrect address, date of birth or driving history, to secure lower premiums.
To avoid being looked into too closely, they may also use a legitimate business address to take out a policy and then add you on as an additional driver.
That’s why it’s important to check all your details carefully to make sure everything’s accurate – if anything’s wrong, you may not be covered.
Use stolen bank details
Fraudsters might buy several policies using stolen bank details and then sell these policies onto their victims.
What could happen if you’ve bought a fake policy
If you realise the policy you’ve been sold is fake and you can prove you’ve been the victim of fraud, we can help – and you may be covered by the Motor Insurers’ Bureau too.
But if you’re aware your policy’s fake and you’ve continued to drive your car without proper insurance, you could:
- have no cover if you were involved in an accident 3
- struggle to get covered in the future or end up paying higher costs
- get a fine, points or even a driving ban
- have your car taken away and crushed
So how can you make sure you’ve got the insurance you need?
Three sure-fire ways to make sure you’re covered
Worried that you’ve been sold a fake policy? Here are three things you can do to check the policy you've been sold is legitimate:
- Check the broker you’ve used is licensed with the Financial Conduct Authority by visiting their website.
- Make sure your insurer has your correct details on file by visiting the Motor Insurance Database website.
- Speak to the insurer directly – not via the broker – to check your policy and its details.
It’s important to be wary of cheap deals on social media – remember, if it looks too good to be true, it probably is. Genuine brokers also wouldn’t usually contact you from their mobile number or via WhatsApp – so be suspicious of any that do.
For more details on staying ahead of these criminals, see how to avoid being scammed.
Check who your post is addressed to
Ghost brokers often use other people’s addresses to buy policies. If they’re using yours, it could impact you getting insurance – and even credit – in the future.
So it’s important to check your post carefully to make sure what’s being sent is addressed to you or someone else living at the address. And if you start getting insurance documents for someone who doesn’t live at your address, call the insurer in question and speak to their fraud department.
It’s a big issue
Ghost broking activity is on the up. In fact, it makes up 20% of all the fraud that’s been picked up by our Policy Fraud team. And we’ve identified that there are approximately 8,000 policies a year which are linked to ghost broking.
So what are we doing to protect you?
We’re working to bring ghost brokers down
We screen every motor policy at quote and sale stages to check for ghost broking activity. And if it’s clear that you’ve been victim of ghost broking, we’ll try to get you sorted with real cover at the right price and deal with your claim.
We have a team of experts dedicated to detecting fraud to protect our customers. They speak to victims to gather evidence, support with referrals to the police and Action Fraud and find ways to spot cases sooner.
Not only that. We also work with closely with the wider financial services industry and enforcement agencies to detect, disrupt and prosecute these criminals together.