People with fake or false car insurance could be fined £300 and six points on licence, with car seized or potentially crushed, a possible court appearance, as well as being liable for the associated costs, if you get involved in an accident said the Insurance Fraud Bureau (IFB) in a campaign, trying to raise awareness about dangers of buying a fake car insurance, just seeing an advert on social media promising a cheap insurance.
YouGov conducted a survey on behalf of IFB and said one in three 18-24 year olds have seen a suspicious looking advert for car insurance on social media. While young people are more susceptible, all age groups are affected with one in five people overall having seen a suspicious advert. Despite this, a worrying two thirds of people surveyed admitted they wouldn’t even check if their seller had a website before buying car insurance. In fact, the survey also revealed that one in three people didn’t know how serious the consequences of having fake or falsified car insurance could be.
The IFB said that Ghost broking is on the rise, with a significant increase in investigations since 2015. In only a few hours, an IFB Intelligence Researcher also found more than 50 suspicious looking social media adverts worthy of further investigation and the IFB is now working with them to get these removed.
With 95% of people surveyed having never heard the term ‘ghost broking’, concern is that a lack awareness about this type of scam could mean that people prioritise saving money without considering the dangers of buying car insurance that isn’t worth the paper it’s written on.
Asians on a bargain hunt, need to be wary as ghost broking scammers use fake adverts to pose as seemingly legitimate sellers on social media, offering cheap car insurance before disappearing without a trace, leaving their victims out of pocket and often uninsured. Young people in particular should be cautious as they could be targeted due to their typically higher insurance premiums and may be more likely to buy these policies due to them often having lower disposable incomes.
Students and bargain hunters fall prey
Often after students have passed their driving test, and buy cars with less than £1000, when they try for insurance, the lowest quote given to them is often no less than £20,000, the highest going up to £34,000.
Most companies refuse to insure first time 18 year old drivers. A desperate measure leads to a desperate action of falling prey to fake policies. The assurance of a cheap policy looks lucrative, and no one realises the dangers and credibility associated with it.
However the older generation, who suffer from insurance cost hikes depending on area they live in, told Asian Voice, they would not just go by a social media advert. Madan Raj, a professional in West London in his mid 30s, told Asian Voice, “I would not just go by an advert, without checking the credibility of the source.”
40 year old Ravi Ramanujam, an IT entrepreneur, who lives in East London told the newsweekly, “I haven't seen any suspicious adverts selling car insurance on social media. I would not buy a car insurance without checking the company details, may how attractive the policy cost be.” But many Asians buying a policy, work on recommendations, go with an insurance company, just by word of mouth, sometimes even getting some extra benefits.
However restauranteur Prabir Chattopadhyay said, he has never encountered any ghost broker on social media, though he has suffered after buying a cheap insurance. He also admitted not checking websites for credibility before buying an insurance. He told Asian Voice, "Even the comparison websites sell insurance list companies with no real offices, they only have call centres. It is hard to know initially who has proper offices until you have an issue, that's when you realise they are not for real."
Discussing these concerning results, Ben Fletcher, Director of the IFB said, “Although legitimate insurers and brokers advertise on social media, it’s essential that people stay savvy to the differences between what’s genuine and what’s fake.
“Enticing offers may seem like an easy way to save money on your car insurance, but the reality is that by cutting corners and not checking if the source is genuine, people are risking their hard earned cash.
“While people have a responsibility to buy from a trusted source, they also have a role to play in the fight against fraud and can help by reporting suspicious adverts to the social media site or reporting ghost broking activity to the IFB’s Cheatline.”
Some quick way to check before taking out a policy:
- Checking the seller has a legitimate website, a UK phone number and address
- If buying through a broker, check they’re registered with British Insurance Brokers’ Association (BIBA)
- If buying directly through an insurer, check they’re a member of Motor Insurers’ Bureau (MIB)
- Check the insurance advisor is registered with the Financial Conduct Authority (FCA)
- Be on the lookout for suspicious adverts