Ghost Broking: Beware of Budget Insurance Offers

In the current financial climate, motorists are desperately seeking out cheaper and cheaper car insurance deals. The motorists worst affected by recent price rises are younger motorists and women especially, given the recent passing of the EU Gender Equality law when it comes to a company calculating its car insurance premiums. In response to the financial desperation of many motorists looking for a budget deal, a new criminal industry has popped up called ‘Ghost Broking’. A recent exposé of this criminal industry revealed that many drivers currently on our roads could be driving uninsured after having been duped into paying for a faulty or fake car insurance policy. The main targets for these ghost brokers are those worst hit by the boom in car insurance prices, such as younger motorists, and those who do not speak English as their first language, making them vulnerable targets.

They operate using inconspicuous advertisements and websites (including websites such as Gumtree), often inventing entirely ersatz policies or applying to other companies on behalf of the customer, altering essential details in the process in order to dramatically reduce cost, but at the same time invalidating the policy. Of course, the customer is unaware that anything may be wrong until they come to make a claim to discover that their policy is entirely worthless and they are entitled to know compensation.

Given the amounts of money that are spent by customers in the insurance industry, it is proving a lucrative industry for criminals to exploit. Unfortunately, this is not the only exploitation of the car insurance industry to happen over the past few months. Other criminal swindles such as fraudulent whiplash claims and crash-for-cash operations also seek to exploit vulnerable motorists facing a complicated industry that is difficult to understand. Another appeal of the insurance industry for criminals is its compulsory nature, ensuring a constant supply of customers. The most frustrating aspect of these criminal activities is that by perpetrating these scams, criminals are often helping to raise the average insurance premium for consumers, meaning the car insurance policyholder suffers further.

Generally, if you find a budget insurance offer it is worth being extremely cautious. Even if a cheap insurance policy is not criminal, it may still be missing key aspects of a basic car insurance policy in order to achieve that eye-grabbing price reduction. It is worth checking your policy documents thoroughly as well as the legitimacy of your insurance provider. If you find yourself a victim of a ghost broker, it is worth contacting the police to prevent the ghost brokers from claiming further victims. In London, a brand new fraud unit has been set up specifically to tackle this problem head-on, with insurance fraud said to cost the country £3 billion per year.

Often, ghost brokers will pretend to be an insurance company staff member, able to provide customers with a staff discount as a way of explaining away the cheap cost of the premium. Ghost brokers will often attempts to appear more friendly and personal than normal insurers, acting somewhat unprofessionally as a means of making the customer feel more comfortable. Having said that, others may appear almost as professional as a legitimate insurer, especially over the phone, but there are still signs that can alert the customer to the fact that they are being conned. A ghost broker will usually ask for cash up front, which is one easy way of spotting them before it is too late. It is important to check a firm’s legitimacy before giving them any payment. Ensure that they are listed on the FSA register for insurance brokers. The FSA also has a list of known scammers in order to keep customers aware of operating con artists on the web.

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