Halloween is coming – so make sure you don’t fall prey to a ghost broker. Young adults, including many cash-strapped students, are often targeted by these scammers, who sell car insurance policies that look cheap.
People between the ages of 17 and 29 are the age group most likely to report being victims of fake car insurance scams, according to figures from Action Fraud.
Often it is not until they file a claim that they realize that their policy is not worth the paper it is written on and in fact they have no valid insurance.
Ghost brokers sell policies that may be faked, or the details may have been tampered with to artificially make the policy appear cheaper. Or, in some cases, a real policy may be taken out, but canceled soon after, when you’ve already parted with your money.
If you’re unsure if you’re dealing with one of these ghouls, here are some potential warning signs to be aware of in order to avoid fake car insurance scams…
1. Is the policy too cheap?
Young people tend to pay higher auto insurance premiums due to higher accident rates in this age group. If the font is significantly cheaper than the others you’ve been offered, consider whether that’s a realistic price or whether it’s too good to be true.
2. How did you hear about it?
Ghost brokers can use social media and messaging apps to get in touch, then after taking your money, they disappear.
3. Where did the broker get the quote from?
Who ? says that legitimate brokers have direct relationships with insurers and don’t rely on comparison websites to find quotes. Moreover, according to the consumer group, it is often against the terms of comparison websites for anyone but an actual customer to use it.
4. Can you contact them?
Which? says a massive red flag should be raised if the business doesn’t seem to exist anywhere other than a simple social media profile.
The City of London Police are also warning people to beware of brokers using only a mobile number or email as a means of contact. The force suggests contacting the insurance company directly to verify the contact details of the broker.
5. Have you checked the records?
Police suggest checking the websites of the Financial Conduct Authority or the British Insurance Brokers’ Association for licensed insurance brokers – register.fca.org.uk and biba.org.uk. People can also check if their vehicle is insured on the auto insurance database website – ownvehicle.askmid.com.