Ghost brokers are haunting motorists, warns a Welsh business.
Gocompare is warning motorists to avoid too good to be true car insurance deals on social media following concerns that fraudsters known as ‘ghost brokers’ are preying on people’s financial worries caused by the Covid pandemic.
The warning comes following the arrest at the end of May, of a man by the City of London Police for selling fraudulent car insurance online and targeting NHS workers with discounts.
Ghost broker is the name given to a scammer who pretends to be a legitimate insurance broker to sell forged or invalid car insurance policies to unsuspecting drivers lured by cheap premiums. In return for the promise of low premiums, ghost brokers ask their victims for an upfront cash payment, which they class as an ‘arrangement fee’.
While the police may be sympathetic to victims of ghost brokers, the consequences of buying fake insurance can be the same as driving uninsured. Victims will still be deemed to be driving illegally and left liable for any claims.
Victims are usually unaware they don’t have genuine cover until they submit a claim following an accident or are stopped by the police for driving without insurance. In some cases, ghost brokers also retain the victim’s card details.
The minimum sanctions for uninsured driving include a £300 fine, six penalty points and, the risk of having your car seized by the police. Newly qualified drivers receiving six penalty points within the first two years of passing their test will have their licence revoked.
Ghost brokers typically defraud victims in one of three ways:
Drivers will also be required to buy a valid policy and may find that they face higher premiums in the future.