What is Ghost Broking?
Although it’s not a new phenomenon, ghost broking is on the rise as people look for ways to reduce their outgoings. It is a scam that typically involves purchasing a legitimate policy from an insurer using false details, doctoring that policy, and then selling it on to ‘customers’.
As the initial policy was purchased from a legitimate provider, it is hard to distinguish that it has been doctored because it looks very real.
Who is at risk from ghost brokers?
Ghost brokers are most likely to target people who have difficulty obtaining insurance policies, for example young or risky drivers with a history of claims or penalty points. These drivers typically find it hard to find insurance policies at a competitive price and often look for other options.
Ghost brokers are usually active on social media sites like Instagram and online forums, as well as out in public at places like university campuses and pubs too.
How do ghost brokers work?
Ghost brokers pose as an intermediary between the customer and the insurance company, purchasing the policy on behalf of the customer using falsified details. However, once the documents have been sent to the customer, the policy is cancelled and the refunded amount is pocketed by the ghost broker.
As the customer is unaware of the cancellation, they will continue driving around illegally, unaware that they are uninsured. In fact, many victims of this scam do not know they’re driving uninsured until they are stopped by the police or they need to claim after an accident.
Avoiding ghost brokers
Here are our tips to stop you from becoming the next victim of ghost brokers
- If it sounds too good to be true it probably is. If other insurance companies have quoted higher premiums yet a broker can find you a price that’s way below the other quotes you should question why.
- Research the insurance broker before making a purchase. Look to see if they have a good quality website, if they have any reviews, and most importantly if they are registered with the Financial Conduct Authority (FCA)
- Legitimate brokers should also be registered with The British Insurers Brokers Association (BIBA)
- If you are buying directly through an insurer, you can check if they are a member of the Motor Insurers Bureau (MIB)
The Bateman Group can help you find the right car insurance policy. As a registered broker with hundreds of happy customers you know you are in safe hands with us.