“Ghost” insurance brokers selling bogus policies is the latest fraud to hit motorists, police have warned.
These fake insurance brokers work in many ways, taking advantage of the public’s love of a bargain and has led to some culprits being jailed after setting up a fake call centre. Customers were drawn in by adverts found on the internet with the promise of buying policies 15% cheaper than those offered by legitimate companies.
Danyal Buckharee, 42, and Giovanni Recchia, 47, went to the extent of using an iPad to recreate office noise to fool the caller as they worked from a “fraud factory” which they operated from a flat in London.
Another method used involves the ghost broker taking out a genuine car insurance policy using authentic, un-doctored information. They would then send the victim a genuine car insurance certificate where shortly after the scammer would cancel the insurance policy, pocketing the refund themselves.
In June, 19-year-old Azeem Mahmood Hussain from Walsall, was sentenced to 12 months imprisonment for selling fake car insurance.
Matt Hussey, detective from the Insurance Fraud Enforcement Department which is part of the City of London Police, said: “Hussain is one of the youngest we’ve dealt with for insurance fraud. He was able to con some people into thinking he was a genuine broker.”
It is thought that up to 20,000 motorists in the UK could be driving around without having a valid car insurance policy.
The scam leaves the victim at risk of being charged by the police with the offence of driving without insurance. The person would face an unlimited fine, 6-8 penalty points on their driving licence and having their car seized.
A new technique that has been adopted recently is that the ghost broker takes out a policy at a false address, which means that motorists living in a high premium area, such as London, are offered insurance as if they lived in a sparsely populated part of the UK.
The driver’s age and previous claims history could also be doctored. Detectives have asked anyone living in remote parts of Scotland to contact the insurer’s fraud department if they receive any mysterious letters relating to car insurance.
“Cash for crash” - where motorists with valid policies are targeted by criminals who stage accidents to claim on insurance - is a similar insurance scam. Another known as “flash for cash,” is when criminals – with the right of way – flash their headlights to signal for the person to keep going before ploughing into them.
If you’re unsure or have never heard of the company then you can search them on the British Insurance Brokers’ Association (BIBA), the industry’s association. BIBA are able to check whether the broker is a member or give you the contact details with one of its members that is local to you.