A scam that appears to have resurfaced in the UK is costing motorists thousands of pounds. Here’s how to avoid becoming a victim of a “ghost broker”.

car insurance scam

Scammers are targetting vulnerable drivers, such as those who are younger and inexperienced as they often pay thousands of pounds for their cover. Reasonably priced insurance for young drivers is often difficult to find, meaning that they are more likely to try alternative methods in order to save money on their first policy.

The scam, known as “ghost broking”, has been seen in the UK before but has recently resurfaced. It sees motorists sold fake insurance policies that don’t actually provide any cover and won’t pay out if the driver is in an accident.

Scammers are using several techniques to con drivers; falsifying insurance documents, providing incorrect driver details to underwriters in order to lower premiums or even taking out a policy on behalf of the driver and then cancelling it in order to have the customer’s money refunded to them without letting the customer know.

The victims often only find out that they have been scammed when it’s too late, either when they come to claim for an accident or if the police stop them and reveal that they are uninsured. As far as the victim’s are aware they have paid their insurance premium and have a valid policy in place.

The recent round of scammers have been heavily using social media to pick out their victims, messaging likely looking parties with the promise that they will save them money on their insurance policy. It’s also not uncommon to see these “ghost brokers” posting on forums and some have even been found to be advertising in newspapers or magazines.

Perhaps the worst thing about the scam is that once the victim finds out that they’ve been ripped off, they often have to then pay out again for a legitimate insurance policy. Some victims will even find themselves on the wrong side of the law as driving without a valid insurance policy is illegal; they could have their vehicle seized by the police meaning that they will need to arrange and pay for impounded car insurance to be allowed to retrieve it.

It’s been estimated that the scam has cost drivers over £165,000 since 2014. Det. Chief Inspector Lee Morton from Kent and Essex Serious Economic Crime Unit has revealed that the scam does not just end up with victims being ripped off, the repercussions can be much worse.

“By not having a valid car insurance, you could get points on your driving licence, your car seized and even destroyed, and you may receive a fixed penalty notice or be liable for claim costs following an accident.

“Scammers will target victims through social media, they may place adverts in newspapers or could cold call you.
“In some instances, the suspects have been recommended by friends and family who are unaware they have fallen for the scam.

“By taking some simple steps you can avoid becoming a victim of ghost broking.”