What is ghost broking?
Fraudsters posing as legitimate insurance brokers working for reputable companies have left hundreds of unwitting motorists on the road with no cover and worthless insurance policies – over 850 reports of ‘ghost broking’ have been reported to the UK's national fraud reporting centre Action Fraud in the last three years, with the average victim losing a whopping £769.
Motorists who have fallen victim to the scam risk prosecution for driving without valid car insurance and could receive points, a fine or have their vehicle seized and destroyed.
Here are 6 ways to avoid the ‘ghost broking’ scam and make sure your car insurance broker is legit…
1. Check your own vehicle on the Motor Insurance Database
Use this free online tool to double check that your vehicle details are on the Motor Insurance Database, which holds details of all genuine live insurance policies in the UK. If you’re not registered, you know you’re not covered.
2. Check your documents online
Skilled ghost brokers can be effective at providing convincing proof of insurance. By checking your policy documents in an online portal from your insurance provider, you can ensure that everything matches up. Paper documents such as letters can be easily forged.
3. Ring your insurer to check your policy has not been cancelled
Ghost brokers often buy policies from legitimate insurance companies and then cancel them without the motorist’s knowledge. If in doubt, call your insurer to double check that your policy’s valid.
4. Check the FCA authorisation of your insurance provider online
The Financial Services Register (FCA) is a public record that shows details of insurers, brokers and individuals that are authorised to sell insurance. You can find out whether a broker you are planning to buy car insurance from is authorised and regulated if not, go elsewhere.
5. Check the broker’s call centre
Check the telephone number that the broker calls you on. It should sound like a call centre and ought to be from a landline or freephone number. If it’s a mobile number or the broker is only available by email it is unlikely to be legitimate.
6. Avoid buying from unusual sources
With rising car insurance premiums, it can be tempting to turn to unusual sources to get a cheaper deal, especially if they seem to be offering a hefty discount. Ghost brokers have been known to approach motorists through adverts on social media, on student websites, online marketplaces such as Gumtree or even in bars and pubs. Our advice is to be vigilant and be aware that if an offer of cheap motor insurance feels too good to be true, then it probably is.