Never heard of ghost broking? Well it is time you did. It has been estimated that over 20,000 drivers have fallen victim to ghost brokers.
So what is ghost broking, well it is where a firm posing as an insurer or broker will sell a policy to an individual and take payment but the individual will never actually be insured. These scams have been going on for a while but recent press coverage has highlighted the huge scale these criminals will go to. Police have recently arrested a number of people in connection with the false selling of insurance and are stepping up their investigations into these so called brokers.
How does it work? Well these ghost brokers will offer cheaper insurance typically through social media and universities. They will reel you in offering low premiums, collect your payment, and then either provide false documentation or disappear altogether leaving you out of pocket. In some instances insurance cover is provided but then the policy is cancelled and the refund is pocketed.
There are ways to protect against being sold false insurance.
- Be wary of companies’ only accepting debit card payment. Credit cards provide more protection against fraudulent use.
- Check your vehicle is on the MID. Once insured go to www.askmid.com and check your vehicle is showing as having valid insurance. Do this on regular intervals as your policy may have been cancelled without you knowing.
- Insure through a known or recommended company. If you have never heard of the company offering you insurance be cautious and make sure you research the company. Check the FCA website for a list of regulated firms.
Many victims are unaware they have been sold a false policy and are therefore unknowingly driving their vehicles illegally on the road. This offence if prosecuted can lead to large fines, penalty points on your driving licence and in the case of new drivers your driving licence could be revoked.
The most commonly affected people are young drivers who face the highest premiums. They are targeted as they face high premiums so the temptation to take a cheaper policy is greater and the profits for the ghost broker are greater.
Michael Kerry from RAC group has commented on this recently adding ‘it is also advisable that you avoid finding your car insurance provider from suspect places on the internet such as social network sites and motor repair places as the issue seems to be far more widespread than was first believed.’
If a deal seems too good to be true maybe it is.