When providing insurance your customers must know the dangers of ghost broking. The city of London Police recently revealed Action Fraud received 694 reports of ghost broking in 2020. This reflects a 10% increase in cases from the previous year. They also stated that 29% of these cases were coming from victims aged 17-29.
As a specialist underwriter of niche and non-standard motor insurance since 1982, we at Granite Underwriting want to ensure your customers avoid this criminal practice by securing hassle-free, no-obligation insurance quotes from a company they can trust.
What is Ghost Broking?
Fraudsters supply false or counterfeit insurance policies to vulnerable or inexperienced motorists. A practice of ghost brokers is that they will offer prices that are far below the expected asking price. However, the policies are fake or invalid and the unwary customer will be without cover or hope of a refund.
This fraudulent practice is on the rise, increasing by over 65% since 2019. Indeed, the IFB (Insurance Fraud Bureau) reported that over 66% of people would not check if an insurer had a legitimate website before purchasing an insurance policy. But how are so many people fooled, and how do these criminals escape justice? We explore this next…
How do they get away with it?
The most common practices when it comes to ghost broking are to exploit vulnerable customers who are new to the insurance process, high-risk drivers, and those without the time to shop around. For these groups, the offer of low insurance premiums and apparent professional appearance are too enticing to resist. Sadly, by that point, your customer will already be on their way to lost earnings and zero coverage.
The most common methods used by ghost brokers include:
- Social media and chat forums – Facebook, Twitter, Instagram, Snapchat and other social media platforms are a popular choice for ghost broking activities advertising their services. A survey by the IFB revealed that one in three 18-24-year-olds have seen a suspicious insurance advert on social media. A typical ghost broking practice is to create bogus profiles to entice customers and make their products appear legitimate. Unfortunately, nothing could be further from the truth.
- Online advertisements – With convincing-looking ad campaigns and documentation it is easy to be fooled. A legitimate insurance broker should be listed on the British Insurance Brokers’ Association If their details, including contact information, are missing this could be evidence of ghost broker activity.
- On-site marketing – Your customers could be approached by a salesperson in a shopping centre or retail park. Pop up sales kiosks are commonplace in the UK, so it is very difficult to tell these fraudsters from the real thing.
- Junk mail – Fliers through your door or spam in your inbox may declare competitive offers but are just a gateway to financial loss.
What happens to victims of Ghost Broking?
If your customers fall victim to ghost broking, it will leave them uninsured and facing points and penalties, should they be stopped by the authorities. Typically, they can expect:
- The vehicle to be seized and potentially crushed
- A fixed penalty of £300 for being uninsured
- Six points on their licence for an IN10 offence
- The further cost of a replacement policy
- Liability for any financial damages incurred during their time behind the wheel with a fake policy
Report the Fraud
Insurance fraud is not a victimless crime. The unlawful practices of ghost broking drive the cost of insurance up for both brokers and customers alike. It also funds wider criminal activity and makes the roads more dangerous for everyone. By reporting suspected ghost broking activity, you and your customers can help the police and regulators bring them to justice.
If your customers have been victims of ghost broking, or you have any information on the activity, you can report it to Action Fraud, the national fraud and cybercrime reporting centre, on 0300 123 2040. If you are in Scotland, contact Police Scotland on 101.
The information you provide will only be used to help detect and prevent fraud and is a vital ingredient in the fight against fraud.
Do not risk it, Granite Underwriting is a name you can trust
With 40 years of experience in the insurance industry, we believe that we work with our brokers to create a mutually beneficial, long-term partnership. We like to provide the service that we would expect ourselves. Our services include:
- Flexible Underwriting – an experienced team who individually underwrites each risk
- Online Portal – for easy risk submission and issuing cover
- Reliability – providing a consistent approach to underwriting and rating
- Net Rated quotations – most of our schemes are Net Rated to provide the best possible rate and allow you to control your earnings
Granite Underwriting is here to here to help grow your business; call 0345 092 0701 for a hassle-free, no-obligation quotation today!
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