As many as 60 drivers a day could be falling victim to online car insurance scammers offering fake policies for sale.
In the last 12 months insurers have identified more than 21,000 fraudulent policies, leading for calls for drivers to be on the lookout for “too-good-to-be-true” deals.
Many of the fake policies reported by insurers to the Insurance Fraud Bureau are believed to be linked to ghost brokers who target young and vulnerable drivers via Instagram and Facebook.
Falling for the scammers’ tricks leaves drivers out of pocket and facing potential prosecution for driving without insurance.
The punishment for driving without insurance is a standard fine of £300 and six penatly points but can reach unlimted fines if the case goes to court. Police can also seize your car and around 100,000 drivers have had vehicles confiscated this year for driving without insurance.
The IFB says that cases of ghost broking scams have doubled in recent years and as police forces around the country clamp down on uninsured drivers it is encouraging motorists to be alert to signs that a deal is too good to be true.
Ghost brokers are known to target young and inexperienced drivers as well as other drivers who face high insurance premiums. Using adverts on social media and encrypted apps like WhatsApp, they offer policies at a fraction of the price of legitimate insurers.
They then either supply faked or altered documents or take out a policy to gain the paperwork before cancelling it and pocketed the refunded costs.
Stephen Dalton, head of intelligence and investigations at IFB, said: “Clearly, fraudsters are attempting to take out a high volume of fraudulent car insurance policies so they can profit at the expense of insurers and honest consumers. This is a serious problem and I believe the figures we’ve uncovered only begin to scratch the surface.
“With police forces upping their efforts to crackdown on uninsured driving, it’s essential that consumers aren’t tempted by ‘too good to be true’ car insurance deals on social media. They’re entirely fake and will result in the driver’s vehicle being seized for no insurance.”
The IFB and police are urging motorists not to buy car insurance via adverts on social media and have issued guidance on how to check any deal you are considering is legitimate.
If you are buying through an insurance broker you should check the seller is registered with the British Insurance brokers’ Association (BIBA). If buying directly through an insurer they should appear as a registered member of the Motor Insurers’ Bureau (MIB).
If you see a suspected ghost broking scam you can report it to police and the IFB’s Cheatline online 0800 422 0421.
Detective Chief Inspector Edelle Michaels, head of the City of London Police’s insurance fraud enforcement department, added: “It really is crucial to check that the person you are speaking with is the real deal. It is quick and easy to find out if a broker is authoriser, simply check the FCA or BIBA website – it could end up saving you a lot of money and help you to avoid issues in the long run.”