What is a Ghost broking?
Ghost broking is a car insurance scam. It’s thought that up to around 21,000 people in the UK have fallen victim to this scam.
Ghost brokers can be individuals or groups who are unlicensed, posing as middlemen for insurance companies. Subsequently, they claim to be able to find cheap car insurance prices for those struggling to get affordable cover.
They have many ways of operating. Some practices include selling bogus paperwork to victims and often selling a policy that will appear against the vehicle on the Motor Insurance Database. However, once sold, they will cancel the policy without you knowing a couple of weeks later so they get the money back leaving you without insurance and potentially liable for fraud and at risk of penalties for driving uninsured.
On average, in 2021, ghost broking victims who contacted Action Fraud reported losses of £1,950 each.
Subsequently, the Insurance Fraud Bureau (IFB) are warning people to ‘safeguard their personal finances against fraud’ amidst the cost of living crisis.
According to Action Fraud “Young and vulnerable people are constantly being targeted online with fake car insurance deals”. Last year, the IFB collectively reported more than 21,000 policies that could be connected to the scam.
Sadly, fraud also resonates within the pensions and investments arena; pension scams are on the rise in the UK. The internet and advances in digital communications mean these kinds of scams are getting more common and harder to identify.
How can I protect myself from scams?
- Firstly, reject any unsolicited calls, emails, text messages or visitors to your door. Legitimate companies’ wont cold call or contact you out of the blue.
- Secondly, before taking action, make sure that the person or firm you are dealing with is regulated by the Financial Conduct Authority (FCA) and are authorised to provide advice/sell products. Check the FCA Register of regulated companies or the FCA Warning List
- Thirdly, check the firm’s HMRC status if applicable.
- Is the firm’s reputation good? Have there been complaints? Do an internet search and check on forums and social media for mentions and personal experiences.
- Where are they located and how easy is it to contact them? Is their address just a PO Box or a serviced office? Are they contactable at their registered office? Is it a dedicated landline or just a random mobile number? If information appears is hidden, be very careful.
- Check any information/paperwork you receive on the FCA’s Scam Smart website
- Seek independent financial advice from an FCA regulated firm such as Carpenter Box Financial Advisers.
- Finally, shop around and get opinions.
If you feel targeted or that you have been scammed, don’t delay in reporting it to Action Fraud on 0330 123 2040 or the Action Fraud Website