At at least one new ‘ghost broking’ network is uncovered every day, with each capable of targeting thousands, according to the industry body the Insurance Fraud Bureau (IFB). Hence an insurance industry campaign has been launched to warn people about the signs of fake car insurance deals. Ghost brokers pose as insurance brokers and sell fake cover through unrealistically priced deals. They often target young drivers on social media, as well as those who are new to the UK, leaving countless people out of pocket and driving uninsured.
In the past 12 months, 596 suspected organised Ghost Broking networks were reported to the IFB. These networks can reach people through social media and community groups, using multiple accounts, targeted posts with up-front discounts, and buyer testimonials to appear credible.
The IFB’s multilingual campaign is Ghost Broking: See Through the Scam, run with the Association of British Insurers (ABI), Chartered Insurance Institute (CII), City of London Police’s Insurance Fraud Enforcement Department (IFED), the financial sector regulator the FCA and several insurers.
Ursula Jallow, Director at the IFB, said: “Ghost brokers deceive people with less experience of buying insurance, which includes young and first-time drivers, and people who have recently moved to the UK. Victims are left out of pocket and risk their vehicle being seized for being uninsured.
“With new ghost broking scams emerging daily, awareness has never been more important. The industry has come together to stand against fraud with a national campaign to tackle the issue. For the first time, multilingual information is also being provided to help raise awareness with people who speak English as a second language.
“We urge anyone with evidence of ghost broking to report it to our confidential CheatLine so we can work with insurers and the police to stop these fraudsters.”
The scale and impact
The scam warning comes as new insights from the CII suggest that millions of drivers could have experienced ghost broking. A survey found that around one in ten adults who purchased motor insurance in the past three years paid an individual for a policy, by card or bank transfer, rather than paying a company. The CII believes this is a risk indicator and therefore a measure of scale, and estimates the one in ten recent buyers grosses up to well over three million UK drivers. Men were more than twice as likely as women to have paid an individual.
Gen Z buyers (aged 18 to 30) appeared to be particularly exposed to these warning signs, with 24pc having paid an individual for motor insurance. Matthew Hill, CII Group CEO said: “Insurance exists to give people confidence and peace of mind, helping them protect what matters and get on with building their lives. ‘Ghost brokers’ are not brokers in any sense of the word: they are fraudsters trading on the reputation of a profession they have no part in, and they undermine that reputation by selling fake cover that leaves people financially exposed and uninsured. We want consumers, particularly young drivers and those new to the UK, to understand the warning signs and take a moment to check that the insurance they are buying is genuine.”
