Watch Out For “Ghost Brokers”

Apparently, the Fraud Enforcement Department of the City of London Police has started a campaign to make motorists more aware of dishonest people arranging false motor insurance policies. There are no doubt a number of car drivers who have ended up with a fictitious set of motor insurance documents that has huge implications for the motorist.

In the space of the last three years, Action Fraud has had in excess of 850 cases of “ghost broking” reported to them. Some of the cases involve motorists being sold false car insurance policies.

You are probably aware that it is the younger motorist who usually ends up, on average, paying more for their car insurance than older drivers. It is probably for that reason that “ghost brokers” target the young driver offering them cover at a vastly reduced premium than what reputable insurance companies would provide the cover at. In fact, it is men who are aged in their 20s who are more likely to be targeted.

It is a concern that there are potentially a significant number of motorists who are driving around in their cars in the belief that they have suitable motor insurance only for them to find out when he or she makes a claim on their car insurance policy that they are not covered as they have been sold a non-existent policy.

This would mean that, in the event of a claim, the insurer would not pay out leaving the motorist with having to pay the repair bill on the damaged vehicle. Potentially worse still is that if a third party had been seriously injured or killed in a road traffic accident involving someone who has taken out a false car insurance policy they could be faced with a claim running into many millions of pounds. The person who has been defrauded could also end up with points on their driving license, their vehicle being confiscated and a fine. They would also be faced with having lost the premiums that they had already paid out and would also have to arrange new car insurance.

A word of warning to motorists. If the price you are being quoted for your car insurance looks to good to be true then it probably is! If you are unsure, then you can always check with the insurer to see if they know the broker or approach the Financial Conduct Authority to confirm if the broker is listed in their records.