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DWF 3Sixty Blog

Ghost Brokers: Beware

Posted by Elliott Seaton on Feb 24, 2016 1:53:30 PM

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Insurance Fraud feels like an issue that has been around forever. Whether it's a fraudulent claim being made, or a false policy being sold, it's a problem that needs directly investigating and exposing. The Association of British Insurers (ABI) reported that Insurers uncover 350 insurance frauds amounting to to £3.6 million, every day. Frauds uncovered in 2014 were double the reported cost of retail crime.

What is a Ghost Broker?

Ghost Brokers are conmen. They usually operate online and draw in their victims by offering extremely cheap policies. These people will purposefully target people who are strapped for cash and will entice them with completely false offerings and policies.

Ghost Brokers tend to operate in the motor insurance world. Clearly there is an attractive market with insurance cover being a legal obligation in order to drive a car. There are many cases of students falling victim to these fraudsters.

New drivers in 2016 are more often looking at premiums in excess of £2000 for the year. Therefore Ghost Brokers see this as an excellent opportunity to offer cover at prices that seem too good to be true. 

The thing is, they usually are.

How is the victim affected?

Using the example of car insurance, being sold a scam insurance policy can mean a few things for the victim, and none of them good:

  • The driver will be driving illegally
  • Should the driver have an incident, they will be unable to claim for any damage
  • If the driver is at fault for an incident where a third party was injured or suffered damaged, they may be forced to pay costs running into the tens or even hundreds of thousands. 

Potential fraudulent policy?

If a vehicle isn't listed on the Motor Insurance Database, then the policy is false and driving it is illegal. 

To be doubly sure, it's best off to check with your insurer (not your broker) whether or not your policy is legitimate. Often brokers will apply for genuine policies on the Insured's behalf. The problem however is that they will edit the details to get the lowest possible rate. 

Having the ability to detect fraudulent behaviour like this is a skill that can save both you, and the organisation you work for, valuable time and money. 

Want to learn how? Read our 15 tactics and 5 strategies to beat the fraudster

You might also want to take a look at the:

7 most bizarre insurance claims of 2015

 

 

Topics: insurance fraud, brokers