It is estimated that around 20,000 motorists could have been duped by a 'ghost broker' and are driving uninsured. Could you be one of them?
How does the scam work – and how can you protect yourself?
In essence, the fraudsters advertise cheap insurance – at a much lower price than an individual can get from a broker or on a comparison site. These fraudsters may have their own website or advertise in supermarkets and newsagents. They may even hand you a leaflet as you walk around your town, or leave you a leaflet through your letter box. Some claim they have superior broker skills and can get you a better deal than you can secure yourself. Some 'ghost brokers' are even claiming to be able to offer special discounts – such as staff discounts!
These unscrupulous people work in a myriad of ways. Some will simply fail to secure any cover at all – they take the money either in cash or credit card and then send fake documents. The driver is then uninsured – and in the event of an accident can find them liable for many thousands of pounds – and they are, of course, driving illegally. Sometimes, they have taken payment from the driver and then used stolen credit card details to pay the insurer. Others will take a 'deposit' from the driver via credit card and then will use the credit card to go on a shopping spree and run up huge debts in the driver's name.
Insurance fraud is a massive and growing problem, estimated to cost the UK £3 billion a year. At the end of last year the City of London established a unit to specifically deal with this problem. Ghost broking is an emerging threat within the insurance fraud arena, disturbing the insurance market itself and leaving many people uninsured.
This type of fraud is often targeted at the most vulnerable, those in desperate need of cheaper insurance (such as young drivers) and those whose English may not be good enough to check all the details on the policy.
You can protect yourself from this type of fraud by being very careful and vigilant. As with all things, if the offer is too good to be true, then it probably is! If you are unsure if an insurance intermediary is legal and legitimate, then check with the Financial Services Authority (FSA) to ensure they are authorised by and registered with the FSA. It is not worth the risk of finding you have bought something which does not exist and that you are driving illegally and risking a criminal record.
Do NOT purchase from anyone not registered with the FSA and NEVER hand over cash or credit card details or put money into a personal bank account (astonishingly, people have done just this!). Make sure you receive a proper certificate of motor insurance, a schedule of cover and the policy document. This may be a paper copy you receive in the post, or they may give you a web address where you can see your policy and print off a copy for yourself.
BEWARE! Make sure you deal with a reputable insurance company. Westhill Insurance Services is an independent company who will shop around to find you the very best deal to suit your needs. Their friendly and professional team will make sure you have the cover you need – not a ghostly, non- existent policy that will disappear into the ether when you need it!
Contact Westhill Insurance Services, today.