Insurers report dozens of attempts by fraudsters posing as insurance brokers try to arrange cut-price cover for drivers every day.
Drivers who have paid for bogus insurance documents are cheated out of millions of pounds a year by these ghost brokers who take their money and disappear, leaving them without the car cover they believe they have paid for:
Now, insurers have launched a campaign to raise awareness of the crooks who prey on young drivers by offering them sometimes unbelievable discounts beating any price directly quoted by brokers or insurance companies.
Simon Douglas, director of AA Insurance, said: “At a time when car insurance has become fiercely competitive, this is a very nasty type of insurance scam that fleeces vulnerable individuals and leaves them with useless car insurance
“Ghost brokers tend to be IT literate and understand the insurance industry well.
“Their scams are sophisticated and can be difficult to identify but insurers are making significant strides to stop them.
“No one knows how many policies that appear legitimate are ghosted. When they do come to light, the broker will have disappeared into thin air. Their customers are left with insurance cover that is no more than an apparition.
“Often the victims are landed with convictions for uninsured driving and their cars confiscated by police.
Insurers are urging drivers offered cheap car insurance to check out the deal before handing over any money by calling the insurance company direct.
The scams even include false phone numbers on the paperwork, so insurers advise drivers to contact them by calling numbers on their web sites.
Last month, a ghost broking network run by two criminals was smashed after taking £680,000 for worthless policies sold at 15% below the cheapest offered elsewhere.
“Common tactics include guarantees to undercut any policy by a significant percentage; fixed-price policies through a reputable company; mobile telephone contact numbers or an unwillingness to provide contact details for the insurance company with whom the business is being placed,” said Douglas.
“If a policy is significantly cheaper than polices available elsewhere, or direct from the insurer’s website, it is probably not legitimate.”