New drivers urged to avoid car insurance scams on social media
The Insurance Fraud Bureau (IFB) is urging new drivers to watch out for bogus car insurance deals being promoted on social media, as hundreds of thousands of learners* get set to pass their tests following a year of disruption caused by Covid-19.
Fake car insurance sales known as ‘Ghost Broking’ is a growing scam which involves fraudsters pretending to be Insurance Brokers in order to sell unrealistically cheap and completely fake policies, often to younger drivers via Facebook and Instagram.
With a large influx of new drivers on the horizon following confirmation from the Driver & Vehicle Standards Agency (DVSA) that driving test centres face an unprecedented challenge to reduce waiting times left by the pandemic, the IFB is warning new motorists to be vigilant to bogus car insurance deals on social media as it could cost them their first car.
Stephen Dalton, Head of Intelligence and Investigations at the IFB, said:
“The last thing new drivers need right now is to risk losing their car for no insurance because they’ve been duped by a scammer on social media. Drivers must carry out basic checks to make sure they’re buying car insurance through a trusted provider, or they’ll be making a very expensive mistake.
“I encourage anyone who’s seen evidence of an insurance scam to report it to the IFB’s confidential Cheatline online or on 0800 422 0421.”
Mark Magee, Head of Driver Policy at the DVSA, said:
“DVSA’s priority is to help everyone through a lifetime of safe driving.
“As well as ensuring you have the skills, knowledge and understanding attitude to drive safely, having valid insurance is of the utmost importance when you drive on your own.
“Check to make sure insurance brokers are genuine before parting with your money.”
Learner drivers in a driving school are typically covered by their instructor’s insurance policy, until they pass their test and need to take out motor insurance for their first car. With a rush of new drivers approaching and with so many people facing financial hardship, the IFB is concerned it will provide fertile ground for ‘Ghost Broker’ scammers.
Fraudsters often tempt younger people with their bogus car insurance deals by promoting unrealistically cheap prices up front, despite the fact insurance is meant to be priced based on the risk of the individual. They often then encourage contact with them through popular end-to-end encrypted messaging software such as WhatsApp.
The IFB which is a not-for-profit organisation that works with the police to crackdown on organised insurance scams has seen its investigations into ‘Ghost Broking’ double since 2016, and the scam has remained prevalent throughout the pandemic.
IFB investigations have found cash-strapped young drivers forking out hundreds of pounds for car insurance that in reality is worth no more than a photoshopped piece of paper. In some cases scammers also use stolen personal information to take out policies which are then doctored before being sold on to customers.
Driving without valid insurance is easily detected by police. Uninsured drivers can have their vehicle instantly seized and are likely to receive six licence points. They can also face court where they might receive an unlimited fine and a driving ban. Furthermore, an uninsured driving conviction will show on records and can affect job prospects.
If a collision is caused by the uninsured driver they may also be liable for covering the costs which can run into the thousands.
Avoiding fake car insurance deals
New drivers are urged to avoid deals on social media or messaging apps and to only purchase car insurance through reputable sellers.
• If buying through an Insurance Broker they should check the seller is registered with the British Insurance brokers’ Association (BIBA).
• If buying directly through an insurer they should appear as a registered member of the Motor Insurers’ Bureau (MIB).
• Checks can also be made to see Insurance Advisors are registered with the Financial Conduct Authority (FCA).
Anyone with evidence of an insurance scam can contact the IFB’s Cheatline which is quick, easy and confidential to use. The Cheatline can be contacted online or via a phoneline (powered by Crimestoppers) on 0800 422 0421.
