Car insurance holders may fall victim to ghost broking schemes unless “checks are made”, according to experts at the Insurance Fraud Bureau (IFB). They have warned drivers to avoid the twisted web of car insurance scams where fraudsters target vulnerable motorists and offer them cheap policies.
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The IFB says with restrictions easing and millions returning to the road, many drivers may be looking for new insurance.
They warn with many facing financial difficulty, some drivers may resort to desperate lengths to secure affordable policies.
Stephen Dalton, Head of Intelligence and Investigations at the IFB said drivers will “naturally” look for the best deals but issued a critical warning.
He said motorists “run the risk” of falling victim to a scan unless drivers were willing to conduct proper checks.
He said: “With many furloughed or out of work, people will naturally be looking for the cheapest car insurance deals to keep their car on the road.
“It’s certainly possible to get a good deal, but unless checks are made to know cover is provided by a genuine insurer, drivers run the risk of falling victim to a ghost broker.
“If anyone thinks they have seen ghost broking activity, this can be reported confidentially to our Cheatline at www.insurancefraudbureau.org.”
Fraudsters conduct ghost broking scams by purchasing cover from legitimate insurance firms and using false information to bring down prices.
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Scammers may also design fake policy documents to look like they have been issued by legitimate firms to catch out unsuspecting and inexperienced drivers.
Most fake car insurance policies are advertised through social media and online adverts and younger drivers are most commonly affected.
A YouGov survey found one in five drivers has seen suspicious car insurance adverts on social media accounts with one in three aged between 18 and 24.
The fake policies make it appear that a driver has cover in p;ace but insurance firms will not accept it when making a claim.
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This can have devastating consequences for road users who will need to pay for any car repairs and compensation for injuries.
Drivers who purchased the fake insurance may find they have their car seized by police and issued a fixed penalty notice of £300.
Those who hold a fake insurance policy could also be issued six points on their driving licence which could see new drivers banned from the road.
Motorists will also lose out on the money they paid for the fake insurance and will be required to purchase a new policy to return to the roads.
Scott Goodliffe, spokesperson for Adrian Flux insurance said the chances of suing a ghost broker for losses “would be next to zero”.
He said: “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.”
To avoid being caught out by a car insurance scam, experts at the IFB have warned drivers should take “extra efforts” to check whether the policy is genuine before buying.
If a driver is purchasing through an Insurance Broker, road users should check whether they are registered with the British Insurance Brokers Association (BIBA).
Legitimate insurers should appear as a registered member of the Motor Insurers’ Bureau (MIB).
Mr Goodliffe said: “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.”
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