Sound scary? You bet it is. And costly too. Recent figures from Action Fraud revealed that drivers aged 17 to 24 (those most likely to fall victim) lose an average of £912 each time.[1]
Although the underhand tactics employed by these car insurance con artists varies from case to case, police insist there are generally three ways that victims get caught out.[2] A popular method is for ghostbrokers to take out a genuine insurance policy on a motorist’s behalf – but promptly cancel it to claim the refund for themselves. Another way is to falsify the details of the person applying and, in doing so, return a cheaper quote than you’ve received elsewhere. Finally, they could resort to plain forgery, providing you with policy documents that aren’t worth the paper they’re printed on.
Of course, going directly to a legitimate provider or using an online price comparison site could help avoid these pitfalls. But it can still prove tricky to avoid ghostbrokers altogether. Many advertise their services in newspapers or online forums, resort to cold calling, or approach people on social media. In some cases, they’ve been introduced to victims by unwitting family members, friends or work colleagues.
No wonder then that youngsters, although the most prone to fall for the scam, are not the only age group at risk of falling victim. Tight budgets and limited experience of buying car insurance provide an obvious reason why students might be duped, but there are many of us out there who might be similarly enticed by what looks like a cheap deal.
As a general rule of thumb, if the offer looks too good to be true then it probably is. Another clue might be the broker’s contact details. If you're only provided with a mobile phone number or email address, your suspicions should be aroused. Like all fraudsters, ghostbrokers don’t want to leave a trail of breadcrumbs after they’ve run off with your cash. If you’re still unsure, contact the insurance company directly to check the broker’s details, or look them up online. A full list of authorised brokers can be found on both the Financial Conduct Authority’s and British Insurance Brokers’ Association’s websites.[3]
It’s so important to trust your instincts on this, and exercise extreme caution if you’ve any doubt about a broker’s claims. As well as the potential to lose out financially, buying fraudulent car insurance puts you at risk of points on your driving licence, a fixed penalty notice and even having your vehicle seized. And, of course, if you’re in an accident you’ll be liable for any claims costs.
Worried you might be a victim of ghostbroking? There are a number of steps you’ll need to take. First, check directly with the insurance company to find out if you’re covered, or enter your details into the Motor Insurance Database (ownvehicle.askmid.com). Bear in mind that the latter will only tell you if you’re insured, and not if your personal or vehicle details are actually correct.
If you discover you’re not covered, avoid driving your car until a new, genuine, policy is in place. In the meantime, you’ll also need to contact Action Fraud (0300 123 2040) and/or the Insurance Fraud Bureau (0800 422 0421) to report what’s happened. They’ll be able to advise on what further action you may need to take.
Brought to you by UniteProtect, who have launched a car insurance comparison website for Unite members - www.UniteCar.co.uk
