Ghost broking is an increasingly prevalent issue in the motor insurance industry, with cases rising by 30% over the past five years [1].
What is Ghost Broking?
Ghost broking involves scammers posing as legitimate insurance brokers to sell fake or invalid car insurance policies. These fraudsters typically target individuals looking for cheaper insurance rates, such as young drivers, students, or those with high premiums. The term “ghost” refers to the fact that these brokers are not officially registered or recognised by any regulatory bodies, and the policies they provide essentially “do not exist.”
How Does Ghost Broking Work?
Ghost brokers typically operate in one of three ways:
- Forgery: Scammers purchase real insurance documents and alter the names and dates to those of the person they’re scamming. They sell these forged policies to multiple people, collecting premiums without providing actual insurance.
- Falsification: Fraudsters buy real policies but falsify personal information to lower the cost. For example, they might report a young driver as being older or change the postcode to one with lower crime rates. When the insurance company discovers the falsified information, they cancel the policy, leaving the victim without coverage.
- Cancellation: Scammers buy a real policy with accurate driver information but cancel it without the customer’s knowledge, collecting the refund. The victim only discovers the scam when they try to make a claim.
Signs of a Ghost Broking Scam
To protect yourself from ghost broking, be on the lookout for these red flags:
- Unbelievably Low Prices: If an insurance deal seems too good to be true, it probably is. Be wary of significantly lower premiums than the market average.
- Social Media Ads: Ghost brokers often advertise on social media platforms, offering attractive deals. Always verify the legitimacy of such offers.
- Lack of Official Contact Information: Legitimate brokers will have a registered business address and contact number. Be cautious if the broker only provides a mobile number or email address.
- Pressure to Pay Quickly: Scammers may pressure you to make a quick decision and pay via bank transfer or other non-traceable methods.
- No FCA Registration: Check if the broker is registered with the Financial Conduct Authority (FCA). You can verify this on the FCA’s official website.
How to Protect Yourself
Here are some steps you can take to avoid falling victim to ghost broking:
- Research the Broker: Always research the broker or company before purchasing a policy. Look for reviews and check their registration with the FCA.
- Verify the Policy: Contact the insurance company directly to verify the policy details. You can also regularly check the status of your insurance through the Motor Insurance Bureau.
- Be Cautious with Payments: Avoid making payments via bank transfer or other non-traceable methods. Use credit cards or other secure payment methods.
- Report Suspicious Activity: If you suspect you’ve been targeted by a ghost broker, report it to police and the FCA.
At Vavista, we are committed to ensuring our customers are well-informed and protected against such scams. Stay vigilant and always verify the authenticity of any insurance offer.
Drive with confidence and get a secure car insurance quote with Vavista today!
[1] ‘Ghost broking’: Reports of scammers selling fake car insurance rise by 30% over five years | UK News | Sky News
Disclaimer: Articles are for general information only – customers should always seek their own independent advice. Vavista is not affiliated with the organisations/businesses mentioned and does not recommend or endorse any of the included products or services. For more information, click here.
