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Looking for a good deal on your car insurance?  Who you gonna call….?  Hopefully not a Ghost Broker!  

Who are Ghost Brokers and what is Ghost Broking?

Nowadays there is a plethora of online options for searching the market for the best deal on your car insurance.  However, you must be aware of the risk of taking out insurance through a ghost broker as there is little chance your policy actually exists.

Insurance fraud is at an all time high.  You would be forgiven for thinking that insurance fraud solely operates when individuals make false claims to acquire insurance cover or fabricate or embellish claims . Ghost brokers however adopt a different approach.  They target the innocent who are legitimately seeking to take out a policy of insurance. They will often target the higher risk driver and those hunting for the cheapest car insurance deal they can get.   The pandemic and social media have both contributed to a rise in both people seeking cheaper Insurance deals and the fraudsters advertising their false policies.

How do they do it?

Ghost Brokers seek to sell you an insurance policy at amazingly low premiums, so tempting that you would be foolish to refuse.   But you need to ask yourself, how do they get their prices so low? 

There are various ways these fraudsters operate:

  • The policy documents are entirely fake, forged to look like they have been issued by a legitimate insurance company;
  • The policy documents are real from a legitimate insurance company, but have been obtained using false information (often the information of a genuine low risk driver) and the Ghost Broker then doctors the documentation prior to sending it out to the victim;
  • The Ghost Broker purchases a legitimate policy, takes the victim’s money and then cancels the policy as soon as the documentation has been obtained; 

In all these examples, the policy isn’t worth the paper it’s written on and the unfortunate victim is likely to be entirely unaware that they do not have valid insurance in place until they are either involved in an accident or stopped by police. Sadly, the consequences of not having valid car insurance still apply.

What are the Consequences?

The Insurance Fraud Bureau (IFB) warns that those who fall victim to this practice  could face:

  • Fixed penalty fines of up to £300.00;
  • Six penalty points on their licence (which for new drivers may equal a ban in its own right). 
  • The victim’s  vehicle being impounded/seized by the police (to release this could cost up to £150.00)
  • A criminal record.
  • In the case of an accident the victim may also be liable for hefty vehicle repair costs and compensation costs if they injure someone.

How do I protect against Ghost Brokers?

The Insurance Fraud Bureau (IFB) recommends that you take extra precaution when purchasing your insurance policy to ensure it is genuine.   

Check the seller has a legitimate website.

  • Contact the insurer for your policy, they will be able to confirm if a policy is in place.
  • If buying via a broker, check with the British Insurance Brokers’ Association (BIBA) if the insurance broker is duly registered and legitimate. 
  • If buying directly via an insurer check with the The Motor Insurers Bureau (MIB) as they hold details of all registered legitimate insurers.
  • Access the Motor Insurers Database, this will show if insurance is in place but be aware that it won’t show you if the correct insurance details have been provided on the policy.
  • You can also check if your insurance advisor is registered with the Financial Conduct Authority (FCA).

If you suspect Ghost Broking you can report anonymously to the IFB Cheatline on 0800 4220 421.

As the saying goes, you often get what you pay for. Don’t let the experience of obtaining cheaper car insurance haunt you!