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Fake Car Insurance Scam Leads to Arrests

ghost broking scamThe British police have been undertaking raids across England to try and tackle the numerous fake car insurance scams that are going on around the country, such as the ‘flash-for-cash’ scam that we covered in an earlier blog post. The campaign has been successful, with 27 criminals being arrested so far. The police raids took place in the Thames Valley, London, Manchester, Leicestershire and the West Midlands earlier today. The authorities have been specifically targeting a scam known as ‘Ghost Broking’ which can leave younger drivers with no insurance. Insurance firms have revealed that this new scam is targeting younger drivers that are frantically searching for an affordable deal on their car insurance.

The ghost brokers are mainly operating on the internet, targeting their victims through the usage of social media, websites and small paid ads which all offer cheap insurance. The saying ‘if it’s too good to be true, it probably is’ definitely applies here. The scammers are targeting young, vulnerable motorists who are faced with sky-high premiums that they simply cannot afford and communities who don’t speak the best English because they are more likely to have a poorer understanding of how the insurance industry is supposed to work.

The scammers have been known to issue completely fictitious insurance policies in some cases. They can also apply for a legitimate insurance policy on the victim’s behalf and altering their data, such as age and profession, in order to drive the cost of the policy down. Victims of the ghost broking scam can face heavy fines and having their vehicle seized by the police if they are found to be holding one of these ‘fake’ insurance policies. 20,000 motorists were estimated to be holding one of these fake insurance policies in November 2011.

160 of London’s police officers were involved in the raids today. Detective Chief Inspector Dave Wood commented, saying: “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. Driver diligence, coupled with enforcement action being taken by IFED and supported by local forces, is the best way to confront this threat now and in the future.” 11 suspects were arrested in the West Midlands, 9 in London, 3 in Manchester, 3 in the Thames Valley and 1 in Leicestershire.

James Savery, 09 October 2013

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