Fake insurance scams target cash-strapped drivers

Insurance policy fraud soared by 31 per cent in 2023 as so-called ‘ghost brokers’ offer deals that are too good to be true

Emissions - clean air zones

Drivers looking for insurance bargains are at risk from a soaring number of fraudulent scams, in which ‘ghost brokers’ offer fake policies at cut prices while pretending to be legitimate online providers.

The threat has been highlighted by LV General Insurance, one of the UK’s leading car insurers, which says its investigations have revealed a 31 per cent increase in policy fraud in the first quarter of 2023 compared to 2022, resulting in many victims unwittingly driving uninsured.

Many such cases are dealt with by the Insurance Fraud Bureau (IFB), which says more than 55,000 fraudulent insurance applications have been discovered in the last 12 months, and which claims ghost brokers are linked to thousands of individual incidents.

"The significant financial pressure that so many people are facing is sadly providing fertile ground for ghost brokers,” said Jon Radford, head of investigations at IFB. “These shameless fraudsters prey on the most financially desperate people, luring them in with too-good-to-be true car insurance deals on social media which are entirely fake. Not only are victims left hundreds of pounds out of pocket, but they can be stopped by the police and have their car taken away for no insurance.”

LV itself says the number of its own ghost broker referrals to the police rose 143 per cent last year, as it plays its part in rooting out criminality, but thinks a tougher approach is required by social media platforms where ghost brokers can operate with relative impunity.

We’re working hard to proactively detect and disrupt the issue of ghost broking, protecting the victims and our customers,” said LV’s director of financial crime Ben Fletcher. “However, we need tougher regulations across social media platforms to protect vulnerable people and prevent the continued rise of ghost broking.”

How to avoid ghost brokers and fake insurance scams

Those drivers at greatest risk of ghost brokers and insurance scams are often young or vulnerable, with little experience of dealing with legitimate insurers, and who are attracted by the low premiums on offer. LV’s experts have come up with a list of tips for anyone uncertain about whether a deal they’re being offered is above board, or who may be susceptible to any kind of car insurance fraud.

  • If it’s too good to be true, it probably is - don’t be lured by a scammer’s low premiums.
  • Be careful how you pay for insurance - anyone asking for admin fee payment into different accounts should raise suspicions.
  • Validate any bank accounts that you’re asked to pay money into.
  • Don’t exchange cash for insurance certificates in car parks or elsewhere.
  • Check the Financial Conduct Authority register to make sure insurers are genuine.
  • Take pictures of accident damage, locations and number of people in the other car, so they can’t be exaggerated in claims.
  • Check for witnesses or other drivers with dashcam footage to help prove what happened.
  • Report ghost broking and insurance fraud on the confidential IFB Cheatline, powered by CrimeStoppers, on 0800 422 0421.

Have you been a victim of a fake insurance scam? Tell us about your experience in the comments section...

Current affairs and features editor

Chris covers all aspects of motoring life for Auto Express. Over a long career he has contributed news and car reviews to brands such as Autocar, WhatCar?, PistonHeads, Goodwood and The Motor Trader.

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