The online/smartphone lifestyle means instant price comparison on things like gifts, clothing, bikes, phones or car insurance has never been easier. But is that super discount deal on your new VW, Nissan or Ford really offering legit cover at an affordable price? Under 25s pay high premiums, so they are easy prey for all kinds of scammers. In fact, one in three 18-24 year olds have seen a suspicious looking advert for car insurance on social media, an Insurance Fraud Bureau (IFB) survey conducted by YouGov reveals.
While young people are more susceptible, all age groups are affected with one in five people overall having seen a suspicious advert. Despite this, a worrying two thirds of people surveyed admitted they wouldn’t even check if their seller had a website before buying car insurance.
IFB warns that people need to be wary as ghost broking scammers use fake adverts to pose as seemingly legitimate sellers on social media, offering cheap car insurance before disappearing without a trace, leaving their victims out of pocket and often uninsured. Young people in particular should be cautious as they could be targeted due to their typically higher insurance premiums and may be more likely to buy these policies.
Ghost broking is on the rise, with the IFB seeing a significant increase in fake insurance brokers since 2015. In only a few hours, an IFB Intelligence Researcher also found more than 50 suspicious looking social media adverts worthy of further investigation and the IFB is now working with them to get these removed.
With 95% of people surveyed having never heard the term ‘ghost broking’, the IFB is concerned that a lack awareness about this type of scam could mean that people prioritise saving money without considering the dangers of buying car insurance that isn’t worth the paper it’s written on.
In fact, the survey revealed that one in three people didn’t know how serious the consequences of having fake or falsified car insurance could be. This could include a £300 fine, six points on your licence, your car being seized and potentially crushed, a possible court appearance, as well as being liable for the associated costs if you were involved in an accident.
Discussing these concerning results, Ben Fletcher, Director of the IFB said: “Although legitimate insurers and brokers advertise on social media, it’s essential that people stay savvy to the differences between what’s genuine and what’s fake.
“Enticing offers may seem like an easy way to save money on your car insurance, but the reality is that by cutting corners and not checking if the source is genuine, people are risking their hard earned cash.
“While people have a responsibility to buy from a trusted source, they also have a role to play in the fight against fraud and can help by reporting suspicious adverts to the social media site or reporting ghost broking activity to the IFB’s Cheatline.”
IFB wants to make sure people aren’t caught out and carry out essential checks before taking out a policy. This includes:
- Checking the seller has a legitimate website, a UK phone number and address
- If buying through a broker, check they’re registered with British Insurance Brokers’ Association (BIBA)
- If buying directly through an insurer, check they’re a member of Motor Insurers’ Bureau (MIB)
- Check the insurance advisor is registered with the Financial Conduct Authority (FCA)
- Be on the lookout for suspicious adverts
The IFB encourages people to be vigilant to ghost broking scams and report suspicious adverts to the IFB’s Cheatline on 0800 4220421.