New figures from the City of London Police’s Insurance Fraud Enforcement Department (IFED) shows young drivers are most likely to fall victim to “ghost brokers” in a motor insurance fraud.
From November 2014 to July 2018, the majority of reports received by Action Fraud, the national fraud and cyber crime centre hosted by the City of London Police, have come from victims aged 17-24.
The reported losses for these victims total £164, 993, with individuals losing on average £912.
Ghost broking is the name given to the scam of selling fraudulent car insurance using three basic methods. They either forge insurance documents, falsify details to bring the price down or take out a genuine policy, before cancelling and claiming the refund plus the victim’s money.
The IFED has created a dedicated ghost broking webpage with more information about the motor insurance fraud and to raise the profile of the crime.
Why does motor insurance fraud target young drivers?
Of those who fall within the 17-24 age bracket, many will be students and will be vulnerable to approaches from ghost brokers.
Students typically don’t have much money at this stage of their lives, and coupled with the high insurance premiums they face, they are prime targets for the motor insurance fraud.
They may also be more susceptible to the cheap, alluring prices that ghost brokers offer. On top of this, some young people may not yet have a complete understanding of the insurance industry and how to insure their car legitimately.
Given this, and the worrying new figures, IFED are encouraging young people, especially students, to be wary of heavily discounted prices on the internet or cheap prices they’re offered directly for car insurance.
If you think you have been a victim of ghost broking, get in touch with IFED on 0207 164 8200 or report it to Action Fraud on 0300 123 2040.
You can also report to the IFB’s Cheatline by completing their online form or by calling anonymously and in confidence on 0800 422 0421.
Being a victim of motor insurance fraud can be devastating
Detective Superintendent Peter Ratcliffe said: “Falling victim to ghost broking can have a devastating effect on people’s lives, and this is especially the case for university students.
“It will impact them financially, at an important stage of their lives, and it could also affect their education and ability to travel.
“While offers of cheap car insurance may be tempting for students, purchasing car insurance through a ghost broker will end up costing you far more in the long run – both in terms of money and your licence.”
According to Scott Goodliffe from the Adrian Flux insurance group, being the victim of a ghost broker could lead to you getting points on your licence and being out of pocket in terms of a fine, lost premium and even more in the event of a claim. He said that in some cases you could even have your car impounded.
“You would have to try to sue the ghost broker to recoup your losses but these people are basically crooks and I assume the success rate would be next to zero.”
Avoid insurance fraud by dealing with a trusted company
He said those seeking insurance online should make sure they are dealing with a bona fide and trusted company by using the call back facility on the official site and by checking it displays the “green padlock” indicating it is a secure website.
“You also need to check all your personal information is shown on the policy documents. We send clients a quote and a statement of facts which includes the client’s information. Make sure everything is disclosed on that and keep it for reference in the future.”
Scott added that the threat posed by ghost brokers illustrated the importance of going to a reputable motor insurance company for guaranteed cover that can provide true peace of mind.
Furthermore, he said, there was no need to cut corners and risk being conned when trying to save money on a policy.
He said: “Adrian Flux policies for younger drivers are already amazingly cheap, and you could save even more money if you follow some simple tips for getting the best possible premiums. For younger drivers that could mean a saving of hundreds, or even thousands of pounds.”