Action Fraud – the national fraud and cybercrime reporting centre run by the City of London Police – has discovered an increasing number of drivers are being sold fake policies via social media.
Between November 2014 and October 2017, Action Fraud received 850 reports linked to ‘ghost broking’, with the total losses for individuals and organisations coming in at £631,000.
Each driver suffered a personal loss of an average £769 each.
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Mark Godfrey, managing director of RAC Insurance, urges every young driver to be “extremely wary” of approaches from so-called insurers via social media.
“Whenever considering young driver insurance cover or learner driver insurance, it is advisable to choose a reputable motor insurer and to ensure they check all of their paperwork,” he said. “If a deal sounds too good to be true then it probably is.”
City of London Police’s Insurance Fraud Enforcement Department (IFED) has now launched a campaign to raise awareness of the scammers – who were found to be targeting men aged 20 to 29.
Mr Godfrey added: “This is a very disturbing crime, which takes advantage of young male drivers who are naturally keen to take out cheaper car insurance as they are paying the highest premiums in the market due to the higher risk.
The IFED has already taken action in 417 cases – including catching one fraudster who was found to have issued 133 fake policies online.
Another was discovered to have made £59,000 from the scams.
The IEFD also cautioned there could be thousands of drivers still out there unaware that their policies are actually fake.
IFED head Detective Chief Inspector Andy Fyfe said: “Ghost brokers trick unsuspecting victims with offers of heavily discounted car insurance, leaving them with a policy that isn’t worth the paper it’s written on and open to the severe harm that comes with driving without valid insurance.”
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“As well as the personal harm experienced by victims, ghost brokers also cause financial harm to the insurance industry, driving up the cost of insurance premiums for all motorists.
“While an offer of cheap car insurance may seem tempting, falling victim to ghost broking will end up costing you far more in the long run – both in terms of money and your licence.”
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