City of London Police executes ten warrants in nationwide week of action against insurance fraudsters

The City of London Police’s Insurance Fraud Enforcement Department (IFED) executed ten warrants last week as part of a crackdown on ‘ghost broking’ across the country, resulting in seven arrests.

‘Ghost broking’ is a tactic used by fraudsters who sell fake car insurance through a number of different methods. 

The arrests formed part of a week of action led by officers from IFED, a specialist police unit dedicated to tackling insurance fraud which is hosted by the City of London Police.

Detective Chief Inspector Edelle Michaels, Head of the City of London Police’s Insurance Fraud Enforcement Department (IFED), said:

“This week of action has been a stark reminder of the immoral tactics that ‘ghost brokers’ use to defraud members of the public, including one man who used his family and friends to refer his illicit services to others.

“It has also reinforced the fact that not all ‘ghost brokers’ look or act the same. We have seen people in their early twenties advertising fraudulent services via sophisticated social media campaigns, to forty-something year olds keeping track of their fraudulent policies through handwritten accounts. We even came across a car dealer using his knowledge of the motor industry and customer relationships to deceive clients into purchasing fraudulent policies.

“The varied face of ‘ghost broking’ means that the public should always be cautious and wary when purchasing insurance. Ask yourself: is the person you are dealing with really who they say they are? If you are not sure, check the list of authorised brokers at FCA or BIBA.”

Officers were deployed across eleven operations in London, Essex, West Yorkshire, Bristol, West Midlands, Derbyshire and Wales from Monday 28 June to Friday 2 July 2021, resulting in the following arrests:

• A 44-year-old man was arrested in Barking on suspicion of Fraud by False Representation and Money Laundering.
• A 26-year-old man was arrested in Chelmsford on suspicion of Fraud by False Representation.
• A 47-year-old man was arrested in Croydon on suspicion of Fraud by False Representation.
• A 36-year-old man was arrested in Bradford on suspicion of Fraud by False Representation and Conspiracy to Defraud.
• A 66-year-old woman was arrested in Bradford on suspicion of Conspiracy to Defraud and Money Laundering.
• A 36-year-old man was arrested in Bristol on suspicion of Fraud by False Representation.
• A 22-year-old man was arrested in East London on suspicion of Fraud by False Representation.

The arrested suspects are thought to have posed as middlemen for insurance companies, claiming to offer legitimate car insurance at a significantly cheaper price. In reality, the policies are either invalid or fraudulent as a result of fraudsters forging insurance documents, falsifying details to bring the price down or taking out a genuine policy but cancelling it soon after.

Most victims do not realise that they do not have genuine cover until they are stopped by police or try to make a claim.

Officers seized over one hundred pieces of evidence during fourteen searches, including fake no-claims bonus discount forms, notebooks with handwritten details of victims and the associated fraudulent policies, and thousands of pounds worth of cash. At one property in Bradford, officers uncovered a car boot filled with hundreds of insurance certificates in various names.

Further operational activity across the week saw five ‘cease and desist’ notices served. These notices are served in person by officers, informing the individual that what they have been doing is illegal and ordering them to stop immediately. The use of ‘cease and desist’ as a tactic is intended to educate those who may not realise that their actions are illegal. The unit will continue to monitor the suspect once the notice has been served and will take further action if necessary.

The enforcement week also included IFED working closely with the Insurance Fraud Bureau (IFB) and  social media companies to take down accounts advertising fraudulent broker services.

Over the past few months, the unit has undertaken an operation dedicated to online disruption in order to remove online entities enabling insurance fraud, such as social media accounts, websites, email addresses and phone numbers. The collaborative efforts of IFED officers, the IFB and social media companies has seen nearly eighty entities put forward for removal this week.

To coincide with the week of action, the unit also ran a campaign of awareness messaging across social media channels and other platforms, educating the public on how they can protect themselves from this type of fraud. The campaign was supported by the insurance industry, as well as community-based media outlets whose readers are a target for ‘ghost brokers’.

Stephen Dalton, Head of Intelligence and Investigations at the Insurance Fraud Bureau (IFB), said:

“Sadly, ‘Ghost Broker’ scammers are not afraid to take advantage of the financial hardship so many drivers are facing right now. With unrealistically cheap yet completely fake car insurance deals being sold across social media, it’s concerning to think there may be many young and vulnerable victims being left out of pocket and potentially facing prosecution for driving without insurance.

“In what has been a significant week of progress, I’m pleased to share that our intelligence and investigations experts have helped IFED to disrupt a considerable number of organised ‘Ghost Broking’ scam networks, which will help to prevent further victims of fraud. The IFB will continue its collaboration with the police and insurers to bring all those responsible for these scams to justice.

“To help avoid falling victim to a ‘Ghost Broking’ scam, I encourage anyone looking for car insurance online to be vigilant and to carry out essential checks before making a purchase.”

James Dalton, Director of General Insurance Policy, the Association of British Insurers, said:

“This crackdown shows that there is no hiding place for these criminals. Whether you are an innocent victim or knowingly take out fake motor insurance, the result is the same – you will be driving illegally with an increasing chance of being caught and getting a criminal record, as well as higher costs for purchasing  legitimate motor cover. Deals that seem too good to be true often are, so play it safe and stay legal by checking that your cover is genuine.”