Drivers are being urged to watch out for bogus motor insurance deals rife on social media, following warnings far more people could fall for the scam amid the cost-of-living crisis. Fake motor insurance deals which are also known as Ghost Broking scams, involve fraudsters pretending to be Brokers in a bid to offer unsuspecting customers temptingly cheap yet entirely fake insurance policies.
Exclusive YouGov research reveals only one in six people (17%) are currently aware of Ghost Broking scams, despite its prevalence on popular sites like Facebook and Instagram. The Insurance Fraud Bureau (IFB) which investigates organised insurance fraud with insurers and UK police, discovered over 55,000 fraudulent motor insurance applications in the past 12 months – more than double the figure previously detected, with Ghost Brokers linked to thousands of cases.
As a result, today IFB in partnership with the General Insurance Fraud Committee (GIFC) and City of London Police’s Insurance Fraud Enforcement Department (IFED), is launching an awareness campaign to educate young drivers most likely to fall victim to the scam, on how to spot the signs and how serious the consequences can be.
As many in the insurance know fakers are online, offering cheap quotes, especially to couriers, food delivery riders and other high risk road users. The practice is called ghost broking and it can have a serious impact. Not only are victims of Ghost Broking scams left out of pocket, but they are driving without valid insurance which means they’re not covered in the event they cause a collision and could be liable to cover the cost.
Victims can face criminal charges for driving without valid insurance which comes with a £300 fine, six licence points, and the vehicle in question can be seized. One in three seized uninsured vehicles are consequently crushed.
It is hoped that this awareness campaign in addition to improved regulations for online advertisements outlined in the Online Safety Bill, will cause significant disruption to fraudsters’ efforts to promote bogus motor insurance deals online.
David Phillips, Chair at the General Insurance Fraud Committee (GIFC) and Claims Validations Technical Manager at NFU Mutual, said:
“We know that fraud increases in times of hardship and that impenitent criminals will be looking to prey upon innocent cash-strapped motorists.
“Insurance fraud is a socially corrosive crime and those that create illegal and bogus policies leave young people, often some of the most vulnerable of society, without cover and without a safety net against the far-reaching consequences of driving without a legal policy in place.
“The General Insurance Fraud Committee (GIFC) brings together the UK’s largest group of insurers to fight insurance fraud and protect our customers from fraud, so we are proud to be working with IFED, IFB and ABI to raise awareness of the pernicious and damaging effects of ghost broking fraud.”
James Burge, head of counter fraud at Allianz Commercial, commented:
“Application fraud has doubled over the past year and may increase further amid the current economic difficulties. In particular, ghost brokers have been targeting young drivers on social media, selling them motor policies that won’t protect them at all. That is why it’s great that the Insurance Fraud Bureau and the whole industry are bringing the fraud fight online. When offered suspicious deals, individuals or businesses can do online checks and, when they have detected a scam, they can report it online. Insurers, brokers and customers can use social media to spread the word about these fake policies. Together we can turn scammers’ weapons against them.”
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