Adverts on services such as Facebook and Instagram claim to offer lower insurance deals than traditional providers and are targeted at new drivers and others who struggle with high premiums.
However, the adverts are fronts for con artists who steal money from unsuspecting motorists and leave them at risk of huge bills and possible prosecution for driving without insurance.
Driving without insurance can carry an unlimited fine, six penalty points and a driving ban. Police can also seize your car. Any driver involved in a crash while uninsured will also have to pay for any damage out of their own pocket.
The Insurance Fraud Bureau is warning that with a rush of new drivers taking to the roads as driving tests return to normal, thousands of new drivers could be exposed to so-called ghost broking scams.
Stephen Dalton, head of intelligence and investigations at the IFB, said: “The last thing new drivers need right now is to risk losing their car for no insurance because they’ve been duped by a scammer on social media. Drivers must carry out basic checks to make sure they’re buying car insurance through a trusted provider, or they’ll be making a very expensive mistake.”
Ghost broking involves criminals offering to arrange cheap insurance for drivers. They advertise unrealistically cheap deals then provide forged or invalid policy documents to victims, often stealing driver’s identities to take out policies which are then doctored to dupe more victims. They also encourage victims to use encrypted communication such as WhatsApp to make it harder to track their activities.
The IFB has warned that a surge in new drivers could lead to a rise in cases as motorists who were previously covered by their instructor’s insurance seek out their own policies.
Mark Magee, head of driver policy at the Driver and Vehicle Standards Agency, which oversees driving tests, commented: “DVSA’s priority is to help everyone through a lifetime of safe driving.
“As well as ensuring you have the skills, knowledge and understanding attitude to drive safely, having valid insurance is of the utmost importance when you drive on your own.
“Check to make sure insurance brokers are genuine before parting with your money.”
How to spot a ghost broker scam
The IFB has issued tips on how to make sure you’re dealing with a legitimate broker.
- Check the seller is registered with the British Insurance brokers’ Association (BIBA). If buying directly through an insurer they should appear as a registered member of the Motor Insurers’ Bureau (MIB). Checks can also be made to see Insurance Advisors are registered with the Financial Conduct Authority (FCA).
- Check that the seller has a legitimate website, a UK phone number and address and to look out for any behaviour that may seem out of the ordinary.
- Remember if the price looks too good to be true, it probably is
- Members of the public can report suspected insurance fraud via IFB’s Cheatline service through a confidential phoneline that is powered by Crimestoppers on 0800 422 0421 or insurance fraud can be reported online on IFB’s website.