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As the next phase of the Government’s roadmap out of lockdown approaches, the City of London Police’s Insurance Fraud Enforcement Department (IFED) is reminding drivers to check that they are insured before heading out on the road.
Some drivers may have declared their vehicle off the road via a Statutory-Off-Road Notification (SORN) to the DVLA during lockdown, meaning that the vehicle needs to be taxed and insured again before it is used. With many looking to restart or renew their car insurance in the coming weeks following months of little driving, it is crucial that the public remain wary of ‘ghost brokers’ offering cheap deals – particularly as the easing of restrictions last year saw an increase in the number of reports for this type of fraud.
‘Ghost broking’ is the name given to a tactic used by fraudsters who sell fake car insurance. These individuals or groups pose as middlemen for well-known insurance companies, claiming they can offer you legitimate car insurance at a significantly cheaper price.
They will then forge insurance documents, falsify your details to bring the price down, or take out a genuine policy for you, but cancel it soon after. Whichever method they use, most victims do not realise they do not have genuine cover until they are stopped by police or have an accident and try to make a claim.
Detective Chief Inspector Edelle Michaels, of the City of London Police’s Insurance Fraud Enforcement Department (IFED), said:
“Whilst there is excited anticipation around a return to normality, this is a time when people need to remain cautious and not get taken for a ride by fraudsters.
“It is easy to forget mundane things like renewing your car insurance, but ‘ghost brokers’ will prey on people looking to restart or renew their policies at short notice and those who may not be as attentive as they usually are when conducting researching online. Often, lack of attention or the promise of a quick, cheap deal can provide an opportunity for fraudsters to strike.
“If in doubt, check it out - the Financial Conduct Authority and British Insurance Brokers’ Association websites offer a list of all authorised insurance brokers. Remember, if a deal sounds too good to be true, it probably is.”
Reports of ‘Ghost Broking’ to Action Fraud in 2020
The easing of restrictions last year saw a steady climb in reports of ‘ghost broking’ to Action Fraud (the national fraud and cyber crime centre), with the peak of reports being received in June when non-essential retail re-opened. The number of reports in June were nearly double that of April and 29 percent higher than the monthly average for 2020.
The number of reports remained high with the further lifting of restrictions on hospitality and hairdressers in July 2020, with a 90 percent increase in reports compared to April. July also saw victims reported losses reach heights of £191,400, more than double the average monthly losses (£83,487) for the rest of 2020.
Whilst Action Fraud received reports of ‘ghost broking’ from across the UK, London appeared to be the most affected area in June and July 2020. Reports from the capital accounted for nearly one-fifth (19%) of all reports, and the number of reports was seven-and-a-half-times higher than the national average for this period. The second and third most affected areas were Essex and Thames Valley (Berkshire, Buckinghamshire and Oxfordshire).
Stephen Dalton, Head of Intelligence and Investigations at the IFB, said:
“As drivers get ready to return to the road from lockdown, it’s sadly possible that more people could get deceived by unrealistically cheap and fake car insurance deals. It’s essential consumers make basic checks when buying car insurance so they know it’s real and won’t risk costing them their freedom to drive. If anyone has seen evidence of insurance fraud they should report it to our confidential Cheatline as soon as possible, so we can work with the authorities to stop the scam”.
How to protect yourself from ‘ghost brokers’
‘Ghost brokers’ often advertise through online adverts, social media platforms such as Instagram and Facebook, and marketplace websites like Gumtree. They may also try to sell insurance policies to you through adverts in pubs, clubs or bars, newsagents and car repair shops.
Be wary of brokers using only mobile phone or email as a way of contact. 'Ghost brokers' have even been reported to use messaging apps, including WhatsApp, Snapchat and Facebook. Fraudsters do not want to be traced after they’ve taken money from their victims.
If a deal seems too good to be true, then it probably is. If you are not sure about the broker, check on the Financial Conduct Authority or the British Insurance Brokers’ Association website for a list of all authorised insurance brokers. You can also contact the insurance company directly to verify the broker’s details. You can check to see if a car appears to be insured on the Motor Insurance Database website.
If you think that you’ve been a victim of a 'ghost broker', you can report your concerns to Action Fraud at actionfraud.police.uk or on 0300 123 2040. You can also contact the Insurance Fraud Bureau via its confidential Cheatline on 0800 422 0421 or on the IFB website.