Ghost Broker Insurance: How to Avoid the Fraudsters
Have you fallen victim to ghost broker insurance, or are concerned about how to avoid the fraudsters? Cybercrime accounted for £5.4 million in losses to businesses and individuals between 2019/20 in the UK alone. Actionfraud, reported the types of crime and losses included social media and email fraud (£3.4m), extortion via hacking (£1.5m), and computer viruses (£240,998).
The Insurance Fraud Enforcement Department reported that victims of ghost brokers lose on average over £1,200. Rapid Vehicle Management, specialists in PCO car and courier van rentals, have therefore put together this useful guide to help you avoid becoming a victim when looking for insurance on a vehicle rental.
What is a ghost broker?
Firstly, Ghost brokers exploit the inexperienced, the high risk, and the vulnerable who may need insurance urgently and have no time to research or read the small print. Secondly, Ghost brokers have increased their illegal activities in recent years by 65% according to the Insurance Fraud Bureau. Finally, once you lose your money to these rogue traders you potentially stand to make further losses due to fines, legal fees, and the obvious cost of an additional policy.
How do they get away with it?
The most common methods used by ghost brokers include:
- Online advertisements – With seemingly legitimate advertising campaigns and documentation it is easy to have the wool pulled over your eyes. Do your research before purchase. Check your insurance broker is licensed with the Financial Conduct Authority by visiting their website. If their details, including contact information, are missing this could be evidence of ghost broker activity.
- Social media and chat forums – Facebook, Twitter, and other social media platforms are regularly subject to misinformation and deception. Ghost brokers create bogus profiles to entice customers, are professional in appearance, hard to trace, and fool many unwary recipients. The products may seem legitimate, but nothing could be further from the truth.
- On-site marketing – You may be approached by a smartly dressed salesperson engaged in unlawful practices in a shopping centre or retail park. Pop up sales kiosks are commonplace in the UK, so it is very hard to tell these fraudsters from the real thing.
- Junk mail – Fliers through your door or spam in your inbox may declare spectacular offers but are just a gateway to generating a financial loss.
Ghost brokers often claim to act as an intermediary between clients and insurance companies. However, they will not be affiliated with any legitimate insurance providers. Most commonly they will offer services in the following formats:
- They will purchase a policy from a reputable insurance company, providing either misleading information or altering the documents upon receipt. The unwary customer could be led to believe that they have coverage based on the information provided but have been given false documentation.
- Ghost brokers will produce counterfeit documents to support a fraudulent policy and issue them to the customer. It is a criminal offence to drive a vehicle without insurance in the UK leaving the real criminals free to prey on more unsuspecting victims.
Both circumstances will leave victims uninsured and facing points and penalties should they be discovered by the authorities. Typically, you could expect:
- Your vehicle to be seized and potentially crushed
- A fixed penalty of £300 for being uninsured
- Six points on your licence for the IN10 offence
- A further cost of a replacement policy
- Liability for any financial damages incurred during your time behind the wheel with a fake policy
Report the fraud
If you suspect that you have fallen victim to a ghost broker, or have information that may lead to their prosecution call:
The services are free and confidential. Information provided will only be used to detect and prevent fraud and hopefully banish ghost brokers and their dishonest dealings.
Are you looking for a vehicle rental that includes insurance?
At Rapid Vehicle Management, you can choose from a PCO car and/or courier van rental including insurance. The benefit of having this combined package is you get peace of mind knowing you are protected behind the wheel but also free from the risk of ghost broking. Through years of listening to our customers and our continuous pursuit of service improvement, we treat every customer fairly. We always aim to deliver a simple, convenient, unrivalled service. Click now for an instant PCO private hire or courier van rental today!
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