Drivers losing money to ‘ghost broker’ schemes – | Tech News

Drivers are being cautioned towards the threats posed by ‘ghost brokers’ offering fraudulent car insurance coverage insurance policies. The Insurance Fraud Bureau (IFB) has famous a worrying escalation in ghost broker operations lately.

These elusive brokers can’t solely depart people financially worse off but additionally criminally responsible for driving with out professional insurance coverage.

Masquerading as real brokers, they often alter coverage particulars to create deceptively decrease premiums. Sometimes it is just when somebody tries to make a declare that they realise the coverage isn’t legitimate.

Ghost brokers typically use social media to goal their victims. Young motorists are particularly at risk as a result of they typically pay more for insurance coverage and are solely of their early years of coping with financial issues.

According to a YouGov ballot commissioned by the IFB in May 2024, a substantial quantity (18%) of people aged 18-24 have scoured social media for car insurance coverage choices.

Criminals might attempt to lure people by offering low-cost upfront quotes, regardless of insurance coverage costs being primarily based on the risk of the person. Policies are sometimes taken out utilizing stolen particulars, which belong to people who’re cheaper to insure, and bought at an artificially diminished charge, or they might merely be copied onto a piece of paper.

Moreover, ghost brokers may inflict additional hurt through the use of personal information for additional illicit actions, together with banking fraud. To help shield younger drivers, the Association of British Insurers (ABI), the City of London Police and the IFB, in affiliation with the Government’s Stop! Think Fraud marketing campaign, have launched a drive to raise awareness of the indicators of ghost broking.

IFB director Ursula Jallow mentioned: “New drivers are caught out by ghost brokers because they face higher premiums and have had less experience in purchasing insurance policies for themselves, which unfortunately means they are more likely to be attracted to car insurance deals that are too good to be true.

“The affect is devastating. We’ve seen victims lose hundreds of kilos, have their identities stolen, their confidence and self-esteem shattered, and, in some instances, they’ve even had their car seized for driving uninsured. It’s actually important that we unfold the phrase to help shield younger drivers from ghost brokers.”

The IFB, in collaboration with the insurance industry, detected around 115,000 fraudulent motor insurance policies between 2023 and 2024. Ghost brokers are believed to be responsible for thousands of these cases.

Fraud minister Lord Hanson said: “This sort of rip-off demonstrates precisely why our national marketing campaign is named Stop! Think Fraud. In a world the place we’re all searching for cut price offers, we have now to stop and assume whether or not the provides we see online are too good to be true.

“Young people especially need to be aware that the scammers are deliberately targeting them through their social media feeds with attractive and authentic-looking offers which will leave them ripped off and driving uninsured.”

Detective Chief Inspector Nik Jethwa, from the City of London Police’s Insurance Fraud Enforcement Department (IFED), mentioned: “Always be cautious when buying insurance. Ask yourself: is the insurance broker you are dealing with really who they say they are? If you aren’t sure, check the lists of authorised brokers at the Financial Conduct Authority and British Insurance Brokers’ Association websites.”

Mark Allen, ABI head of fraud and financial crime, added: “With many households looking to cut costs, no-one can afford to fall foul to fraudsters. In our increasingly digital world, we recognise that young people including students may be particularly vulnerable to ghost brokers who advertise fraudulent insurance deals online or across social media.

“But it’s important to do not forget that anybody, no matter their age, might be a sufferer of insurance coverage fraud. If you’re searching for cowl online, we advocate contacting insurance coverage corporations immediately or checking the Financial Services Register to confirm broker particulars. The golden rule is to by no means act in haste – if a deal appears too good to be true, then it in all probability is.”

Potential crimson flags of a ghost broker:

1. The coverage could also be unrealistically low-cost, with an upfront quote.

2. The vendor solely desires to talk in personal direct messages on social media or WhatsApp.

3. The advert might look unprofessional.

4. The vendor might not have a professional web site, UK landline quantity or deal with.

Insurance scams might be reported to the IFB’s confidential CheatLine online or by cellphone.