Ghost Broking Update
Last year, 517 reports of fraudulent insurance were made by victims, according to Action Fraud. These were caused by ghost broking. A Ghost Broker is not authorised to sell insurance to the public and is not supervised by the Central Bank. A Ghost Broker is acting illegally by pretending to be an insurance broker. In most cases, a Ghost Broker is involved with car insurance, however businesses have fallen victim to commercial and property insurance scams.
It works by the Ghost Broker buying genuine insurance policies from an insurance company on the basis of false or inaccurate customer information. They sell fake or forged insurance certificates, and vulnerable clients are none-the-wiser that they are actually operating illegally without valid insurance.
Here are four tips to ensuring a broker is legit:
1. Proper Contact Details
No mobile phone numbers or Whatsapp messages. A legit broker is professional, using a verified work email address with an official signature. Do your research on the company and ensure their contact details match up with who they are purporting to be online.
2. Are they verified?
Check the Financial Conduct Authority‘s website to ensure the broker is verified.
3. Check any documents you receive
Perhaps the broker has sent you documents for your approval. Double check these over and ensure all your details are correct. You could be in for a nasty shock if you have to go to the insurer directly and find out you are not actually covered.
4. Check what others have to say
If you are suspecting of a dodgy broker, you are probably not the first. Others who may have fallen victim to a ghost broker will have posted online warning about using their service. Check online and see if your dodgy broker shows up.
At Romero Insurance Brokers, we ride ourselves on our positive customer service record and excellent rating. Check out our rave customer reviews here.
Who Do Ghost Brokers Target?
The number of people scammed increased more than 66% during the 2020 months of July to December. An area showing increasing reports of fraud is, indeed, insurance broking. Ghost broking has seen a 10% increase in 2020, mostly affecting those under the age of 29, however many over-29 year olds have also fallen victim to the fraudsters.
The City of London Police’s Insurance Fraud Enforcement Department (IFED) executed ten warrants as part of a crackdown on ‘ghost broking’ across the country, resulting in seven arrests – reported news outlets. The FCA have also put out a nationwide warning on fraudulent clones of insurance websites. Customers, companies and brokers must all be vigilant of these fraudulent operations.
Ghost brokers are fraudsters who sell clients cheap insurance deals that hold no legitimacy and provide no form of cover. The scam takes a few forms, but mainly consists of either: Paid for insurance company policies which are then doctored before being sold to clients, or, fake policies created which are then sold to clients. As well as forged documents, fraudulent brokers may arrange and charge for a valid insurance policy which they will then cancel without your knowledge, leaving you uninsured and unaware.
The consequences of falling victim to this insurance scam are often disastrous, the clients having not only lost money but also now not insured for their vehicle fleet, commercial business, building and contents – whatever it may be. Being uninsured or underinsured can lead to a fixed penalty notice. You are also liable for any damage caused or injury sustained during your period without lawful insurance.
Experts believe ghost broking is on the rise because of lockdown, fraudsters cashing in on the uncertainty brought on by the pandemic. Scams are becoming more and more complex, using cloned websites and fake phishing text messaging. These methods can help advertise ghost brokers which entice in high-premium clients with generous deals.
In this case, the boilerplate motto still stands: If it looks too good to be true, it probably is.
How to Avoid Ghost Brokers?
The easiest way to beat ghost insurance brokers is to have a trained eye; lookout for discrepancies in their website; major mistakes including broken links indicate a quickly built empty shell of a webpage. These websites can however, be perfect replicas and be very convincing. The Insurance Fraud Bureau (IFB) asks clients to check every broker to see if they’re registered with the British Insurance Brokers’ Association (BIBA). They also need to be registered with the Financial Conduct Authority (FCA) to practice lawfully.
Be wary of any mention of “safe accounts” or personal mobile numbers. All telephone numbers can be checked at who-called.co.uk, an online reverse phone lookup tool. If you know of or suspect any ghost brokers, this should be reported to the police.
To make sure your current insurance policy is genuine, we recommend you contact your insurer and ask the up-to-date details about your policy. If you suspect you may have fallen victim to a fraud, you can call the Action Fraud helpline on 0300 123 2040.
Romero Insurance Brokers
Romero Insurance is a chartered, independent insurance broker located in the UK. We have been trading for 20 years, providing exceptional service to commercial businesses. We have won multiple awards, including The Insurance Times Customer Champion 2020 Gold Award. Recognised in the industry, we have a strong relationship with the FCA and representatives on the board of the Society of Insurance Broking.
For quality, consistency and care, choose Romero. Enquire by phone on 0113 281 8110 or contact us via our webpage.