Ghost broking? What’s that?It’s when fraudsters, known as ghost brokers, sell fake car insurance policies at cheap prices to unsuspecting customers. It can be a scary situation as you don’t know if you’ve been targeted, and the consequences can be severe.
The police can stop you for driving without insurance and issue you a fine, penalty points or even seize your car. Worse still, if you’re involved in an accident and make a claim, you’ll find out you don’t have any cover at all.
We’re here to help make sure you can spot this type of scam and let you know what to do if it happens to you.
So, who are ghost brokers targeting?Ghost brokers tend to target young drivers and other people who have little or no experience getting car insurance. They’ll also target people who aren’t fluent in English as well as high risk drivers looking to make a saving on their premiums.
These scammers look for potential marks, and often target them, through social media, money-saving forums or student websites.
You might be looking for a cheap deal but could end up getting sold a policy that’s worthless. A major tell-tale sign is if your insurance premium is significantly lower than you’d expect. In other words, if it looks too good to be true there’s a good chance it is.
How’s ghost broking actually done?Here are three ways a so-called ghost broker might con you into purchasing a fake car insurance policy:
1. Using false details
This is when an insurance policy is bought using your name but with fake information to make it cheaper. Details like driving experience, postcode, the car insured or even your job title are changed. The policy is fraudulent and the policyholder has no idea.
2. With forged documentation
Here, real insurance documents are used but they’ve been changed to include another driver’s details. It may look like you have an insurance policy but, in fact, there’s nothing in your name.
3. By cancelling the policy
A ghost broker might buy a real policy on your behalf with all the right details, then cancel the policy once you’ve paid them for it. The scammers then pocket the refund, leaving you uninsured with no knowledge that you’re driving without cover.
What if I got my policy from a ghost broker without realising?Unfortunately, you’ll be in the same position as having no insurance policy at all, which is legal requirement in the UK.
It can be a big mistake that comes back to haunt you as you could face penalties such as a £300 fine, 6 penalty points or your car being seized.
In addition to losing out on a policy you thought was valid, you’ll also need to take out valid car insurance so you’re covered to drive in the future.
What’s more, if you’re involved in an accident that’s your fault under a ghost broking policy, you won’t have any cover. So you’ll need to pay for any damages, including compensation for injuries or medical treatment.
What can I do to avoid falling into this trap?
Look out for signs of ghost broking…
- Be wary of premiums that are much cheaper compared to policies from well-known providers
- Think about how the broker’s contacting you - genuine brokers don’t use things like WhatsApp or direct messaging
- Ask yourself if the seller has a legitimate website and UK landline number
Don’t forget to do your checks...
- Call the insurer directly and ask them about your policy to check if it’s valid
- Check if the broker is registered with the British Insurance Brokers’ Association or if the insurance provider is a member of the Motor Insurers’ Bureau
- See if your car’s insured by checking the Motor Insurers’ Database but always get in touch with the insurer if you think your policy might not be genuine as it could have been set up using fake details
The best way to avoid being scammed is by buying insurance from leading car insurance providers such as Flow.
I’m struggling to afford my car insurance, what should I do?
You should get in touch with your insurer if you’re concerned that you won’t be able to pay for your cover.
How can I get the cost of my premium down?These tips can help you keep costs down:
Keep your car secure
If you can, park your car in a locked garage or secure driveway rather than on the road. Fitting trackers and an alarm may also help to reduce your premium.
Make sure your policy reflects your yearly mileage
Limiting your annual mileage can help save you money on your insurance, especially if your car is going to be a second vehicle used occasionally.
For more help on paying the bills, read our cost of living page for more support.