An online insurance scam is catching out unsuspecting motorists looking for a good deal across the UK, and many might not know they’ve been conned.
Drivers looking to save money on their car insurance have been lured in with cheaper car insurance promises from online ‘ghost brokers’. But the people selling these policies are merely posing as insurance brokers and selling fake insurance policies.
If a driver needed to make a claim with one of these policies, it would not be worth the paper it’s written on, according to the UK’s Insurance Fraud Bureau (IFB).
The IFB said these fake policies are either bought from legitimate insurance providers, using false information, and then doctored before being sold on to unwitting drivers, or are simply forged replicas.
How to avoid buying a fake insurance policy
- Find a legitimate broker on British Insurance Brokers' Association website and check your broker is FCA registered
- Beware of buying insurance policies from unusual sources such as social networks, newsagents or bars and pubs
- Check your insurance provider is a Motor Insurers' Bureau (MIB) member
- You can check if your car is insured and registered on the Motor Insurance Database
While the IFB is warning people to be aware of buying insurance through social media sites, more and more insurance companies – including Admiral and our sister company firstcarquote – advertise insurance products online. If you’re unsure if the ad is from a legitimate company, contact the insurer directly for confirmation or visit the FCA website linked above.
Ghost brokering has hit the headlines again recently with the case of Derby man, Shafiq Ali, who was sent more than 120 insurance documents for policies he hadn’t taken out. Each one was addressed to a different person and contained real insurance documents from a known company.
While Mr Ali hadn’t bought any insurance, his address was being used by a fraudulent broker.
What happens if I buy a fake insurance policy?
The consequences of taking out fake car insurance are similar to the penalties of driving without insurance – you won’t be covered to drive and are therefore breaking the law.
If you are caught driving without insurance you could face:
- Police seizing your car
- Paying a £300 fixed penalty notice
- Liability for any damage caused while driving without valid insurance, which could include hefty compensation claims if someone is injured in an accident
You will also have to buy a legitimate insurance policy and potentially hand over at least £150 to get your car back from the police compound if your vehicle is seized.
Ben Fletcher, from the IFB, which has successfully prosecuted ghost-brokers in the past, said it was an "extremely complex" scam and urged motorists to remain vigilant.
Earlier this month (June 2017) 19-year-old Azeem Mahmood Hussain, of Broadway West, Walsall, was jailed for 12 months for selling fake motor insurance.
An investigation by the Insurance Fraud Enforcement Department (IFED), part of the City of London Police, uncovered his illegal activity and found he was selling false car insurance through Gumtree adverts.
City of London Police reported that over 100 templates and forged documents were found on Hussain’s laptop. Messages on his mobile showed him arranging motor insurance policies, asking unsuspecting victims for their personal information including their names, dates of birth and addresses.
Detective Sergeant Matt Hussey, from the Insurance Fraud Enforcement Department said: “Hussain is one of the youngest ever people we’ve dealt with for insurance fraud and this was a crude attempt by him to make some fast cash from his bedroom.
“He was advertising cheap motor insurance deals on Gumtree and sadly he was able to con some people into thinking he was a genuine broker.
“Anyone who sees adverts for cheap insurance deals should always question whether it is legitimate – if it seems too good to be true, then it probably is. If you don’t have legitimate insurance, then you risk your car being seized by police or you could find yourself unprotected if you’re involved in a collision.”
- If you suspect a ghost broker is trying to contact you, call the fraud bureau on 0800 422 0421