Drivers desperate to slash their insurance premiums are being duped by ‘ghost brokers’ into buying bogus policies.
Police are today are issuing a fresh warning about the scam which they fear has resulted in thousands of motorists driving on the roads without valid insurance.
Fraudsters are targeting younger drivers – and particularly young men – who have been hit by spiralling premiums in recent years.
Fraudsters are targeting younger drivers – and particularly young men – who have been hit by spiralling premiums in recent years
Criminals are posting adverts for cut price insurance on social media sites such as Facebook, Instagram and Snapchat, as well as student websites or money-saving forums. They also advertise in pubs, clubs, newsagents and car repair shops offering cut price motor insurance for as little as £100 a year.
The average premium for a 17-22 man is £1650, according to the AA and £1371 for a young woman.
Most fraudsters forge documents but others take out genuine policies, then cancel them and claim refunds as well as pocketing their victims’ money.
The warning has been issued by the City of London Police fraud squad launches a national campaign alerting drivers of the dangers.
Action Fraud, the UK’s fraud reporting centre overseen by the City of London Police, has reviewedmore than 850 reports linked to ghost broking during the past three years, costing individuals and organisations £631,000.
Of these reports 417 resulted in action being taken by the City of London Police’s insurance fraud enforcement department
But it is feared that the problem may be far more widespread, with many drivers having no idea their policies are bogus until they make claims or get stopped by police.
The consequences of being caught out can be severe, not just financially.
Victims are being conned out of £769 on average for the fake car insurance policies, and will not be able to claim if they are involved in an accident.
Police are today are issuing a fresh warning about the scam which they fear has resulted in thousands of motorists driving on the roads without valid insurance
As they are driving illegally they may incur a fine and six points on their driving license.
Their car may be seized and destroyed unless they pay a fee to release it.
But in the most extreme cases they may be liable for costs which could run in to thousands – even millions – of pounds if they were to blame for a crash in which a third party was injured.
Police spokesman Detective Chief Inspector Andy Fyfe said: ‘Ghost brokers leave victims with policies that are worthless and open to the severe harm that comes with driving without valid insurance.They also cause financial harm to the insurance industry by pushing up the cost of premiums.’.
Offenders prosecuted included a man who set up 133 fake policies, a teenage ghost broker who was sentenced to jail and a man who made £59,000 from ghost broking.
Ben Fletcher, director of the Insurance Fraud Bureau, said: ‘It is essential that we raise awareness about the issue of ghost broking to stop innocent victims being targeted and to educate those who may consider buying insurance from a disreputable source.’
Mark Allen, fraud manager at the Association of British Insurers, added: ‘Always be on your guard against someone offering you a deal that looks too good to be true.’