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5 ways to spot a ghost broker offering fake auto insurance policies

By on October 18, 2021 0

Halloween is approaching – so make sure you don’t fall prey to a ghost broker. Young adults, including many cash-strapped students, are often the target of these scammers, who sell auto insurance policies that look tempting and cheap.

People aged 17 to 29 are the age group most likely to report being victims of bogus auto insurance scams, according to figures from Action Fraud.

Often, it’s only when they make a claim that they realize that their policy is not worth the paper it’s written on, and in fact, they don’t have any valid insurance.

Ghost brokers sell fonts that may be forged, or the details may have been tampered with to artificially make the font appear cheaper. Or, in some cases, a real policy can be taken out, but canceled soon after, when you’ve already lost your money.

If you’re unsure if you’re dealing with one of these ghouls, here are some potential warning signs to consider in order to avoid bogus auto insurance scams …

1. Is politics too cheap?

Young people tend to pay higher insurance premiums for auto insurance because of the higher accident rates in this age group. If the font is significantly cheaper than others that have been offered to you, consider whether this is a realistic price or if it is too good to be true.

2. How did you hear about it?

Ghost brokers can use social media and messaging apps to get in touch, and then after taking your money, they’re gone.

3. Where did the broker get the quote from?

What ? claims that legitimate brokers have direct relationships with insurers and do not rely on comparison websites for quotes. Additionally, according to the consumer group, it is often against the terms of comparison websites for anyone except an actual customer to use it.

4. Can you contact them?

Who? says a huge red flag should be raised if the business doesn’t appear to exist anywhere other than a simple social media profile.

City of London Police are also warning people against brokers who only use a cell phone number or email address as a means of contact. The force suggests contacting the insurance company directly to verify the broker’s contact details.

5. Have you checked the records?

Police suggest checking the websites of the Financial Conduct Authority or the British Insurance Brokers’ Association for Licensed Insurance Brokers – register.fca.org.uk and biba.org.uk. People can also check if their vehicle is insured on the Auto Insurance Database website – ownvehicle.askmid.com.