Ghost broking scam – Police warn of rise in fake car insurance

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London car traffic crossing tower bridge at sunset
London car traffic crossing tower bridge at sunset

Thousands of UK motorists could be driving without insurance because of fraudsters known as “ghost brokers” selling fake insurance policies online, police have warned.

Ghost brokers typically target men in their 20s using social media such as Facebook and Instagram.

City of London Police’s Insurance Fraud Enforcement Department (IFED) warn motorists to ‘Steer Clear of Fraud’ from these mischievous tricksters via its national campaign launched yesterday.

In the last three years, detectives from Action Fraud, the national fraud and cyber reporting, received more than 850 reports of the ghost broking scam that caused individuals and organisations victims losing an estimated total of £631,000.

Millennials, the technology-savvy and always-on social media generation, are the perfect victims who ‘ghost brokers’ often contact on Facebook, Instagram and on many other applications.

They also use other contact methods which include adverts in newspapers and magazines, cold calls and being introduced, either directly or by friends, family members or work colleagues. One specific case is the Portuguese community living around the Epsom and Surrey area where, Renan Gomes, a 33-year-old courier defrauded his victims and insurance company out of a combined £89,000.

Mr Gomes set himself up as an unauthorised insurance broker and sold policies to people who often didn’t speak English. He’s not only threw out of the window his duty of care but also left them with worthless policies.

IFED Detective Constable Eva Woods who investigated the case said: “The warning here is if you get yourself insurance through an unlicensed broker like Gomes, then the likelihood is that you’ll be left without valid cover. You could end up having to foot a hefty bill yourself should you have an accident and you could also have your car seized by police if it’s on the road without valid insurance.

Anyone looking for cheap car insurance deals from an insurance broker should make sure that broker is authorised with the FCA (Financial Conduct Authority). ”

A national campaign #SteerClearofFraud has now been launched to warn drivers to watch out for heavily discounted policies on the Internet or cheap insurance prices they are offered directly.

The campaign serves to bring people’s attention to the issue as the police believe that ghost broking is actually being under reported each year due to the way ghost brokers deceive motorists into thinking they have legitimate insurance, when in fact it’s worthless.

They only become aware they don’t have genuine cover when they are stopped by police or attempt to make a claim.

Most people that fall for the scam are young drivers who have seen their car insurance costs going through the roof, recently. According to the Association of British Insurers (ABI), the average cost of motor cover has leapt by 29 percent since 2014.

Young adults just starting as drivers without discount or driving experience face a huge bill that is pushing them to desperately looking for ways to save money on their insurance.

“While an offer of cheap car insurance may seem tempting, falling victim to ghost broking will end up costing you far more in the long run – both in terms of money and your licence.” said IFED Detective Chief Inspector Andy Fyfe.

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