Fraudster sentenced for £17,000 Instagram insurance policy scam

A man who made £17,618 by selling invalid car insurance policies on Instagram has been sentenced.

Wahidullah Usmani, 22, of Prayle Grove, Cricklewood, operated as a ‘ghost broker’, a term used to describe fraudsters who sell fake insurance policies, often via social media platforms or messaging apps.

Ghost brokers pose as middlemen for well-known insurance companies, claiming that they can offer legitimate car insurance at a significantly cheaper price. They will forge insurance documents, falsify customer details to bring the cost of the premium down, or take out a genuine policy and cancel it soon after. Crucially, victims often only realise that they do not have genuine cover when they try to make a claim on insurance or are stopped by police.

Usmani pleaded guilty on 6 June 2024, at Inner London Crown Court, to fraud by false representation, carrying on a regulated activity when not an authorised person and money laundering. He was sentenced at the same court on 24 July 2024 to 24 months imprisonment, suspended for 24 months. He must also complete a 15 day rehabilitation activity requirement and pay £1,000 in costs.

Detective Sergeant Phil Corcoran, from the City of London Police’s Insurance Fraud Enforcement Department (IFED), said:

“Usmani enticed his victims with the offer of cheap car insurance, but left them with policies that were worth less than the paper they were printed on.

“Ghost brokers like Usmani prioritise their own financial gain above all else. We know that the rising cost of insurance premiums means people are always looking for a cheap deal, but it’s vital to check that you’re buying an insurance policy from a legitimate source.

"Buying a policy from a ghost broker could end up costing you a fine, points on your licence and your car being seized – not to mention having to cover the cost of a new, valid policy.”

The case was referred to the City of London Police’s Insurance Fraud Enforcement Department (IFED) in January 2021, by LV= General Insurance (LV=).

The fraud team at LV= identified a motor insurance policy that it suspected was fraudulent. The policyholder told LV= that they had bought insurance from a broker who used an Instagram account called @cheap_car_insurance_quotes. According to the account, customers could “save up to 60% on every quote”.

Further enquiries showed that the account was linked to Usmani and that he had taken out another 13 fraudulent motor insurance policies. In each case, customers paid Usmani up to £250 and he manipulated their details to obtain cheaper quotes.

Officers from IFED arrested Usmani on 14 April 2021. An examination of a mobile phone seized during a search of his home address confirmed that he operated the @cheap_car_insurance_quotes account.

IFED’s analysis of Usmani’s bank account revealed that it had received several payments worth a total of £17,618 between February 2020 and January 2021. Payments worth a total of £2,888 were linked to the 14 policies at LV=, and another £4,319 was confirmed to be related to further ghost broking activity. Nineteen additional payments were suspected to be related to ghost broking.

The @cheap_car_insurance_quotes Instagram account has since been taken down.

Ben Fletcher, Director of Financial Crime at LV= General Insurance and Allianz personal lines business, commented:

“This is a fantastic result, and we’ve worked collaboratively to achieve a great outcome against a ghost broker who was deliberately lying, making money, and putting innocent motorists at risk. Cases such as this only serve to drive up costs for our genuine customers, which is why we’re committed to uncovering insurance fraud and get the right outcome for all. Unfortunately, if it looks too good to be true it probably is, and it’s worth looking out for signs such as insurance documents which may not look genuine."

Nicola Smith, Intelligence and Investigations Manager at the Insurance Fraud Bureau (IFB), said:

"Usmani took advantage of those who struggled to afford car insurance, just to line his own pockets; and not only did this cost victims their hard-earned cash, but they also risked serious criminal consequences for driving without valid insurance.

"Ghost broking is widespread across social media and more people must know the signs, which is why we're campaigning in partnership with IFED and the insurance industry to raise awareness of this important issue.”

According to the latest figures from the Insurance Fraud Bureau (IFB), the number of people who fell victim to ghost brokers on social media increased by 6 per cent last year. While one in five 18-24 year olds now use social media to search for car insurance, a recent YouGov survey revealed that only one in ten people are familiar with ghost broking.

Common signs of a ghost broker

• The price you are quoted for insurance is much cheaper than you can find anywhere else.
• The broker only wants to communicate via social media or a messaging app.
• An advert for insurance looks unprofessional or is poorly spelt.
• The broker doesn't have a legitimate website, UK landline number or address.
• The broker offers insurance at an upfront cost, despite insurance being meant to be priced based on the risk of the individual.

Examples of Instagram posts on the @cheap_car_insurance_quotes account.

If you are not sure about an insurance broker, check the Financial Conduct Authority or 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.

If you think you have been a victim of ghost broking, you can report your concerns to Action Fraud, the national fraud and cybercrime reporting service, at actionfraud.police.uk or on 0300 123 2040. You can also make a report to the Insurance Fraud Bureau via its confidential Cheatline on 0800 422 0421 or at insurancefraudbureau.org.