Liz Banner, Head of Policy Validation, Allianz UK said “In the UK, ghost brokers have become a growing concern in the motor insurance industry, using crafty tactics to trick people into buying fake policies…”

Understanding ghost broking

  • Ghost brokers pose as genuine insurance agents to sell fraudulent policies.
  • In motor insurance, they may use stolen personal details to create fake policies.
  • These actions can lead to financial and reputational harm for customers.
  • Counterfeit motor insurance policies appear legitimate but offer no real coverage.
  • Customers often discover the scam when attempting to make a claim and find their policy invalid.

Helping customers verify their policies

Brokers play a crucial role in helping customers verify the authenticity of motor insurance policies. It’s encouraged to purchase insurance through licensed brokers and direct channels to minimise the risk of ghost brokers.

Confirming policy details directly with your insurer will help safeguard finances and give you peace of mind.

Ask them to verify:

1. contact information

2. coverage terms

3. policy registration.

 

What brokers should know about ghost broking

Tactics and channels: Ghost brokers often operate online, using social media platforms, websites, and email to reach potential victims. They may also use word-of-mouth referrals to gain trust.

Target audience: Ghost brokers typically target individuals who are looking for affordable insurance options, such as young drivers or those with limited insurance knowledge. Being aware of these vulnerable groups and providing tailored advice can help them avoid scams.

Signs of fraud: Educating customers on common signs of ghost broking, such as unusually low premiums, pressure to pay quickly, lack of official documentation, and unconventional payment methods like cash or wire transfers will give customers the edge on ghost brokers.

Legal implications:?Falling victim to ghost broking can lead to legal challenges for customers, such as unknowingly driving without valid insurance, which is against the law in the UK. This situation might result in fines, points on their license, responsibility for accident-related costs, and potential difficulties in securing insurance in the future.

Taking action against ghost broking

Ghost broking is an issue that needs careful attention and action. By being informed about the risks and checking your motor insurance policies, this can help steer clear of financial loss and fraud.

We are here to help

Please do get in touch if you would like to know more about how we can support you and your business.

This article was adapted from an article by Allianz which can be found here.