Motorists Tricked into Driving Without Insurance via New Scam

How ghost brokers con drivers into buying fake insurance, the penalties for falling foul and how to stay safe

 Ghost brokers modus operandi

Motorists that fall victim to fraudulent, callous, ghost brokers pay for non existent insurance and face penalties if stopped by police, the Steer Clear of Fraud Campaign revealed. The scam is straightforward. The broker promises to find you insurance at a competitive, too good to be true, price. The fraudster then either:

  • Produces fake documents not liked to a policy
  • Starts a policy, but provides false information to reduce the premium – which makes it invalid - then pockets the difference
  • Starts a policy, but cancels it and retains the refund

Penalties for not having motor insurance

The police make no allowance if you become the victim of such crime. Whatever your intention and belief, you have not got valid insurance and that is against the law. Potential sanctions include:

  • Fine
  • Penalty points
  • Vehicle seized (or crushed)
  • Costs to retrieve your impounded vehicle
  • Liable for costs if involved in a collision
  • Immediate requirement to purchase genuine insurance

Number of victims

Action Fraud is the fraud and cyber reporting centre. Between November 2014 and October 2017, it received 850 reports that related to ghost brokers although the true number of victims is likely higher. Reported losses totalled £631,000 which equated to £769 per victim. It found one perpetrator alone set up 133 polices.

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How to avoid ghost brokers

The Steer Clear of Fraud Campaign revealed how to avoid falling victim to a greedy, selfish, ghost broker. The precautions include:

  • Recognise that ghost brokers tend to scout for business via social media, adverts in newspapers/magazines and cold calling
  • Note that if a offer looks too good to be true, it probably is
  • Beware brokers that can only be contacted via a mobile/e-mail
  • The British Insurance Brokers’ Association website has a list of authorised brokers - so check your broker’s credentials
  • The Motor Insurance Database confirms whether your vehicle is insured – so refer to its website

The Association of British Insurers Fraud and Financial Crime Manager, Mark Allen, confirmed: “Driving without valid motor insurance is a crime, full stop. Always be on your guard against someone offering you a deal that is too good to be true.” He added:

“The chance of getting caught without insurance is greater than ever. Furthermore, a criminal conviction for driving uninsured will make getting future insurance much more expensive. Stay legal on the road by shopping around in the competitive motor insurance market for the right insurance at the best price”, Allen concluded.

perhaps if prices were at a sensible level, there wouldn't be so many uninsured drivers to begin with. my insurance at 42 years old is no cheaper than it was when I was 17 as a figure, yet the cover is dramatically reduced, even for 'comprehensive'

Unless it is impossible to do so it is best to deal and trade locally so if things do go wrong it is only a short walk to heave a brick through the broker's window... I miss the days when the "Man from the Pru", the Co-op or Britannic took care of all my insurance needs without me lifting a finger, except for opening the door to him and making him a cuppa while he filled in the proposal form...

If you are paying the same as you did 15 years ago, in real terms the amount is considerably lower bearing in mind the increase in the cost of living over the same period.

that may be true BUT when I was younger I also had far better cover. ive been driving since I was 17. I had comprehensive cover as soon as I could. by age 19 my cover had ZERO excess and covered me for ANY CAR COMPREHENSIVE COVER. I phoned the insurers when I changed car and was told 'no need to notify us, you are covered for ANY car which is why the cover doesn't display a reg number' now, for one, try getting a policy with ZERO compulsory excess, second the 'add ons' like courtesy car, windscreen cover, legal etc were all INCLUDED back then and the 'any car' cover (if its included in the policy at all, which some don't) is now limited to third party only. to get what I had, but with far higher excesses I would have to get a motor trade policy which, when I costed it out, would cost DOUBLE what I currently pay. now due to personal circumstances, I NEED to be able to get into a car and drive it without having to worry whether I'm legal to do so, hence I always get the 'any car' extension on the policy (or I will go elsewhere) but even THIS is an issue with the likes of Motability insurance as to drive their cars you HAVE to be named on the policy and to be named you HAVE to live within 5 miles of the person for which the car is used for which in the case of one person that I may need to drive for means is impossible as I fall JUST OUTSIDE the area allowed. using my own car proves almost impossible. my point being if I had the same level of cover, the prices wouldn't bother me so much. but cover is reduced where price isn't so if you want to talk real terms, to get the same cover my premiums would at least DOUBLE in cost from what they currently are, excesses would be up from the ZERO I had to in the region of £500 at last check, so even counting cost of living increases, to get like for like, the insurance is at least the same, if not more expensive now as it was when I had zero no claims discount as a teenager!!!!

The driving other cars extension has only ever provided third party cover. Also,it has always been a requirement to inform your insurer of any new vehicle purchased to ensure you are covered, otherwise they will not be able to charge the correct premium. From what you are saying, it appears you have a Motability vehicle. They have a block insurance and probably have restrictions to reduce their premiums. If you own your own car then it is worth shopping around for insurance; you would find significant savings can be made.

i don't own the motability vehicle, a family member does. I do shop around annually for insurance to get the best deal around and regarding the insurance I had in my teens, the policy was with Sun Alliance (who are now totally uncompetitive with their premiums for me) and the policy DID cover me comprehensive on ANY car. this was NOT an error on their part as at the time, a number of people I knew in the local area had the same policies as myself. over the period I had the policy (I renewed it until the prices suddenly became severely uncompetitive) it was queried at least every renewal and every time I changed vehicle (and likewise with another family member who had an identical policy at the time) and was confirmed correct.