Automotive Insurance Fraud: What Is Ghostbroking? 4 Methods Drivers Can Keep away from Faux Insurance policies – Each day Specific
Car insurance is vital for all motorists, but a new scam called Ghost Broking threatens not only to leave drivers without valid insurance, but also out of their own pockets. Stephen Adams, Senior Fraud Manager at Confused.com spoke to Express.co.uk to provide an insight into ghost broking and how drivers can avoid it.
According to Action Fraud, there were 351 reports of ghostbroking between January and August 2021.
Most of these were reported by drivers between the ages of 17 and 19, with people losing an average of £ 2,250 each, along with the risk of driving with disability insurance.
What is a ghost broking scam?
Ghost broking is a form of insurance fraud in which victims unwittingly purchase fake car insurance.
Ghost brokers behind the scam are professional scammers who sell fake or invalid discounted insurance policies.
These scams are mostly advertised online but can also be advertised in local communities.
Most of the time, their main selling point is cheap car insurance.
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How Can You Spot and Avoid a Ghost Broking Scam?
Mr Adams told Express.co.uk the top four signs consumers should look for when buying car insurance and what to do if they suspect their information has been used by a ghost broker.
How they communicate with you
Well-known companies are always connected to a landline number and should state this as the main contact on their official website.
Mr Adams said, "You wouldn't normally find a ghost broker with a landline number as they tend to only use cell phone numbers and often communicate via WhatsApp or Facebook Messenger."
These seasoned professionals also know how to sell a deal and this can be seen in their language usage.
Mr. Adams stated, “If you are being sold a deal when you worry, the ghost broker has ways to divert doubts.
"This could mean dazzling you with jargon or self-confidence."
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How they advertise their services
Ads for auto insurance offers on social media should be a big red flag, according to the expert.
He explained, “Scammers also tend to advertise on student websites, social media platforms, and money-saving platforms, which are clearly aimed at younger audiences.
“There are numerous advertisements on Instagram from 'brokers' who promise to take out high quality insurance at affordable prices.
Ghost brokers can also use comparison sites when they get quotes for you.
Mr Adams also pointed out that they can even claim to work for well-known insurance companies.
He said, "Legitimate brokers usually have direct relationships with the insurers and policies and can find you the best deals, so be sure to check both of them and do your research."
The price is too good to be true
If the price seems too good to be true, according to the expert, it most likely is.
He said, "Always remember that if an insurance quote is significantly cheaper than several others you have received, it is very likely that it is being offered by a scammer."
When buying car insurance, it is advisable to remember and compare all offers.
Mr. Adams remarked, "If they are all much more expensive, the alarm bells should be ringing."
It's also a good idea to check customer feedback for the company to see how reputable the company is in making your offerings.
Mr Adams added, “Note that while you would normally have to pay an 'administration fee' either before or after the policy is in place, 'Ghost Broker' can tend to control the process.
"Sometimes they will even make the payment for you first and then forward the paperwork to fill out and request that the administration fee be paid directly to them rather than the insurance company."
Always check the FCDO
A legitimate, licensed insurance broker should appear in the financial services registry on the Financial Conduct Authority (FCA) website.
Mr. Adams said, "If the 'Broker' 'is not there, doesn't have their own website, or just reveals a cell phone number or email address as a contact, you should definitely be suspicious."
What to do if your data has been used by a ghost broker
In the unfortunate event that your details have been used by a ghost broker, the first step is to contact the insurer and ask them to close the policy.
Mr. Adams stated, "This will cause the insurance company to conduct further verifications if someone re-applies for a policy with your details."
If you are involved in a fraud, it is essential to report this to Action Fraud.
Mr. Adams urges clients to "provide as much information as possible about the 'Agent' and how they contacted you".
He added, “You can also contact the Insurance Fraud Bureau (IFB) cheat line or the Credit Industry Fraud Avoidance System (CIFA) registry.
“Keep an eye on your bank accounts to make sure everything is as it should be.
"Also, be sure to check your credit report as this will allow you to flag any searches from companies you don't know that could indicate a fraudulent application on your behalf."