If you’ve not yet heard of ghost broking, you’re probably wondering what it is and how you might be affected. Here we set out to explain how people are being scammed, what to look out for and how to protect yourself.
Firstly, Ghost broking is a type of insurance scam run by fraudsters (known as ghost brokers of course). They will often advertise online (on social media, within online forums and sometimes with paid adverts on google) with the promise of cheap insurance. They typically target those with potentially higher premiums, because who doesn’t want to save themselves some money right?!
The ghost brokers will often appeal to clients by convincing them that they have a relationship with an insurance provider and have negotiated a special scheme in order to get them cheaper insurance. Naturally, this is what a legitimate insurance broker will do, but a ghost broker, wont actually be working with an insurer, they’ll just tell you they are.
Fake documentation – if you hand over your details to a ghost broker, you’ll firstly receive a fake quote that will seem too good to be true (because as the saying goes… it is). You might then get fake insurance documentation and certificates of insurance. They do this in a number of ways – either by buying real car insurance policies using fake details or amending them to sell on to their victims or by designing their own false documents which appear to be from the insurer.
These fraudsters will then take your money, not only leaving you out of pocket but without the right insurance or with no cover at all.
Fake no claims bonus – if you’ve got a number of years without any claims, you may get a no claims bonus and a letter or certificate to prove this from your previous or current insurer. Some ghost brokers will try to ‘sell’ you a no claims bonus certificate to help bring down the cost of your insurance. But don’t be fooled. You don’t need to pay for these – the no claims are earned and your previous insurer will be able to provide you with a letter detailing this, which you can pass on to your new insurer.
How to avoid these insurance scams
- If you’re using a broker – check their website – does it look professional, are there any typos or grammatical errors, do they have a footer at the bottom of the page saying that they’re registered with the FCA?
- Check the FCA register to see if the company name is registered with the FCA. There’s details of key people, address that’s registered etc.
- What’s the process for getting a quote? Typically an insurance broker will ask a number of questions to get all the details they need, sometimes around 30 questions, depending on what you need cover for. Ghost brokers only ask a few.
- Check whether they’ve given you fake documents. You should either receive all of your documents in the post, via email (check the email address of the sender) or from a secure document portal which you have to log into. If they’re sending these via another method i.e. whatsapp or direct message through social channels – be very wary. Whilst some genuine brokers will talk about insurance through social media groups and forums and may speak to potential clients via Direct Messages (we do this at A-Plan), your documentation you receive should be through those more official channels (post, email or portal).
- Check your policy details – if you’ve received your documentation – check that they’ve captured all the information correctly i.e name, address, occupation, date of birth, type of cover etc. Is everything correct and as per the information you provided correct? If not, contact the insurer directly.
Reporting a ghost broker
Action Fraud is the UK’s national reporting centre for fraud and cybercrime. If you’re a victim of ghost broking, you should notify Action Fraud as soon as possible via their website >> https://www.actionfraud.police.uk/
As an insurance broker ourselves, we work with a panel of leading insurers to provide a wide range of insurance solutions for our clients. We have over 40 years’ experience in helping clients to find the right cover and have 100 branches across the country. So, if you need help or think you may have been caught out by a ghost broker, we can help. Simply get in touch with your local A-Plan Insurance branch.