What is Ghost Broking
Prosura is warning consumers to beware of Ghost Brokers. But, what is a Ghost Broker? Why is this car insurance crime on the rise? What can you do as a consumer to protect yourself when you are sourcing your next car insurance policy?
Ghost Broking and Ghost Brokers are on the rise. In May 2023, LV London Victoria highlighted that year on year (21-22), policy fraud rose by 31%. Behind the rise was a 143% increase in Ghost Broker referrals to the police1.
“If an insurance deal looks too good to be true it could be a scammer,” this is the warning from The Insurance Fraud Bureau as it builds awareness of the rising number of Ghost Broker scams that are putting drivers at risk.
Falling foul of a Ghost Broker could leave you dealing with no car insurance and the implications of being uninsured. You may also be fined and prosecuted.
What is a Ghost Broker?
A Ghost Broker describes a fraudster who pretends to be a genuine Insurance Broker, so that they can sell fraudulent car insurance.
How do Ghost Brokers work?
City of London Police see Ghost Brokers operating in three main ways
- Forging insurance documents
- Falsifying the customers’ details to bring the price of a policy down
- Take out a genuine policy for a customer, before cancelling it soon after
Whether documents are being forged, falsified or a policy is cancelled, it is unlikely that you will know. Not having genuine cover will only become apparent if you get stopped by police or if you need to make a claim.
Thoughts from our Broking & Compliance Manager
Alison Dawson is Prosura’s Broking & Compliance Manager, here she explains more about Ghost Brokers.
“Ghost Brokers are a real worry for consumers and our industry. It’s particularly common around vehicle insurance as policy costs are increasing, especially for new and young drivers and also those where English is an additional language. Unfortunately, when people are desperate for a better deal, they often miss the signs that things may not be right.
“Our advice is very much in line with the City of London Police. If your policy cost looks too good to be true, it probably is. In these situations, you should take a moment or two to complete some extra checks.”
How do I know if it’s a ghost broker?
There are usually several signs that you may be dealing with a Ghost Broker. Here are a few signs to look out for and some tips on how you can reduce the risk of falling foul of scammers.
Ghost brokers advertising hotspots
If you suspect that you could be trading with a Ghost Broker, one of the first things to do is think about how you heard about them. Considering what tactics were used to get your attention is also important.
The City of London Police provide examples of Ghost broking hotspots. They reference: “advertising on student websites, money-saving forums, university notice boards and marketplace websites such as Gumtree.” They even go as far as saying pubs, clubs or bars, newsagents and car repair shops are places that you could be targeted.
Ghost Brokers making contact
How you are being contacted can be a red flag. Mobile phones and email are popular means of communication. Reports received by The City of London Police also include the messaging apps WhatsApp, Snapchat and Facebook.
How can I check if I have a genuine policy?
There are several ways to check that you have a genuine policy, Alison explains.
“In this day and age, advertisers use all sorts of routes and tactics for reaching a potential customer, equally understanding how people use technology means that you can usually get hold of your broker in lots of different ways – including through WhatsApp.
“So, if in doubt just check it out! Simple searches will help you to confirm whether your insurance broker is genuine.
“Start by finding out what company your broker is calling from. Do they have a website and social channels? Is the website up-to-date? Do they have a team page and is your contact featured? Are the company’s social channels active?
“Pick the phone up and call the company, you can use this to confirm that the person you are dealing with exists.
“If you cannot find a website, see if they are registered with BIBA – The British Insurance Brokers Association, here you can check members and access key contact details.
“While registering with BIBA is not a legal requirement for insurance brokers, they must be members of the Financial Services Register. Here you can check the company’s existence and obtain the right details for contacting them.”
Report Ghost Broking scams
If the worst happens and you have been scammed by a ghost broker, please report this to the Insurance Fraud Bureau’s confidential, quick and easy CheatLine.
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