Vulnerable drivers targeted by social media car insurance scams

Wednesday, 5th February 2020, 4:41 pm
Updated Wednesday, 5th February 2020, 4:41 pm

Young and vulnerable drivers are being defrauded by online scammers claiming to offer cheap car insurance on social media.

Research has found that it takes as little as 10 seconds to find a so-called ghost broker fraudulently selling insurance online, prompting calls for drivers to be alert to the scam.

Ghost brokers claim to be able to arrange car insurance at much lower prices than regular providers but leave their victims out of pocket and without any cover.

They are increasingly common online and are known to target drivers who struggle to afford insurance, including the young and those with motoring convictions.

They claim to offer policies on behalf of major insurance providers then use a variety of methods to rip off victims. These include selling fraudulent policies that never exist, using false information to secure a policy in someone’s name, or even buying a legitimate policy only to then cancel it, pocketing the refund.

The scams appear to offer a way to save money but can end up costing drivers more in the long run (Photo: Shutterstock)

In every case, the victim is left unknowingly without insurance, leaving them at risk of prosecution and of being out of pocket if their car is damaged or stolen.

'Everyone pays more'

Insurer Direct Line has revealed that it has helped identify and shut down more than 500 ghost broking accounts on social media.

Steve Barrett, head of motor insurance at Direct Line, commented: “Social media platforms are being targeted by these scam artists, and it is important we continue to work together to protect consumers from being misled into buying a worthless car insurance policy.

“Fraud adds £50 to the insurance premiums of honest customers, so for every person who mistakenly thinks they save money using a ghost broker; everyone else pays more.

“Consumers need to be beware when responding to adverts and profiles that appear ‘too good to be true’ on social media, as they could find themselves a victim of fraud, losing money and potentially facing criminal charges.

"Whilst insurers are doing all they can to spot these fake accounts to protect honest policyholders, drivers may only find out they have been scammed when they come to make a claim or if pulled over for a random police check.”

How to spot a ghost broking scam

To help you spot and avoid ghost brokers Direct Line has offered the following advice:

The policy holder is responsible for the information provided in their application, if a the information given is not accurate, their insurance will be invalid.Only purchase motor insurance from reputable sources. Some major insurers don’t sell through brokers and only sell direct via their own website or phone line, so check before handing over any money. Official social media accounts on major platforms have a blue tick, So avoid those accounts that don’t have oneSteer clear, if a ‘broker’ only uses a mobile number or has no business premises or uses personal sounding email address (i.e. no company affiliation)Contact the insurer directly if going through a broker to check if they are authorised to sell policies on the company’s behalf, or check the broker out at biba.org.uk or register.fca.org.ukAdverts promising insurance for a fixed price without having any details of your personal situation or the vehicle you are seeking to insure are likely to be fraudulent - Reviews – if these feature screengrabs of text messages, they are extremely likely to be fakeCheck the language – if communications include text such as “you can’t believe how cheap it is bro” and “totally legit not a scam mate” – it probably is fraudulentIntuition – ask yourself if the deal appears ‘too good to be true’, does the website or social media page appear reputable?

How to check if you're dealing with a scammer:

Check if the broker is registered with FCA and/or BIBACheck your details with the insurer you have been informed you are insured withCheck if your car is insured online via www.askMID.com

If you think you’ve been targeted by or fallen victim to a scam you should report it to Action Fraud: 0300 123 2040, contact the Insurance Fraud Bureau Cheatline on 0800 422 0421 ad report it to the social media platform.