Last updated 21 July 2016

How to Avoid Ghost Brokering

How to Avoid Ghost Brokering -“Ghost brokering” is done by swindlers pretending to be insurance brokers. They target unsuspecting people searching for affordable car insurance policies. These ghost brokers introduce themselves as middlemen between a real insurance broker and prospective customers.

They produce fake car insurance policies in exchange, putting thousands of motorists at risk.This illegal scheme was first brought to light by news agency BBC in 2011 when it reported 20,000 motorists who scammed by ghost brokers. Joe Pattinson, spokesperson for BMW Financial Services, says: "Ghost broking is a serious problem for the insurance industry and unfortunately one that is growing. It can be very lucrative because it provides a method of pocketing large sums of cash quickly, making it an increasingly popular method of fraud for criminals."

Ghost brokers usually find their way through social networking sites were they advertise car insurance plans with low premiums. When calling prospects, these criminals use mobile applications that mimic office background sounds. Pete Townsend, a 19-year-old victim, said: "I went online. I was just having a browse about and a website came up where you fill in a form and they call you back.” He added that a company called him back and provided him “quite a good quote”.

Young drivers and beginners who hunt for cheap car insurance premiums are frequently targeted by ghost brokers. In the UK, many non-English speaking people have reported being scammed by the insurance scheme.The City of London Police’s Insurance Fraud Enforcement Department (IFED) is currently investigating reports on ghost brokering. A recent report said that 27 people were arrested in fraud-related incidents across the UK. The suspects were accosted in Leicestershire, London, Manchester, Thames Valley and the West Midlands. 

Detective Chief Inspector Dave Wood, head of IFED, said: “The consequences for innocent motorists who fall victims to ghost brokers can be dire, so it is absolutely vital that drivers shopping for car insurance online, or through other means, question what they are being offered to ensure they get a real deal.”

For expats living and working abroad, insurance policies are a must. One must be cautious and aware at all times, the following can be helpful to avoid ‘ghost brokers’:

•    Make sure that the present car insurance policy is genuine. Contact the insurance company and verify information and payment conditions.

•    Beware of online advertisements on fixed-price insurance or special offers. Most insurance companies do not give out promotions on insurance plans.

•    Ghost brokers usually request for cash payments instead of credit cards.

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