Black Friday warning: Consumers urged to avoid ‘too good to be true’ bogus car insurance deals on social media

“If it’s too good to be true it probably is” – that’s the message the Insurance Fraud Bureau (IFB) is warning consumers following concerns that ‘Ghost Broking’ fraudsters may try to exploit the Black Friday shopping event with bogus car insurance deals online.

‘Ghost Brokers’ are fraudsters that pose as genuine Insurance Brokers and are known to offer illegal Broker services on online ads and social media channels such as Facebook and Instagram. By targeting younger people and vulnerable communities with unrealistically cheap car insurance deals consumers are often left out of pocket and driving without valid insurance.

According to the City of London Police’s Insurance Fraud Enforcement Department (IFED) the average person loses around £769 when taking out a fraudulent motor insurance policy from a ‘Ghost Broker’.

With an increase in online sales driven by the big shopping event and a number of car insurance deal incentives appearing online, consumers are being reminded to ensure they don’t take risks and do the right checks before making a purchase.  

“Think before you act – an enticing offer might seem like a great way to save money but the reality is if you don’t do basic checks to know that you’re buying car insurance from a genuine Broker, your ‘policy’ may be worth no more than the paper it’s written on”.

“When buying through a Broker, always check to see that they’re registered with the British Insurance Brokers’ Association (BIBA) and report suspected insurance fraud to IFB’s CheatLine.” – Stephen Dalton, Head of Intelligence and Investigations at IFB.

IFB is a not-for-profit organisation that acts as a central intelligence hub, using industry data to work with UK police to detect and disrupt organised criminal groups from committing fraud.

Over the past four years IFB has seen its percentage of live investigations into Ghost Broking double which indicates that the scam is on the rise. It also means an increased number of people are at risk for driving without valid insurance which can have serious consequences.

“Ghost brokers leave victims with a policy that isn’t worth the paper it’s written on and open to the severe consequences that comes with driving without valid insurance. It’s a legal obligation to have valid car insurance, and if you’re caught by police without it you could face the following; points on your driving licence, a fixed penalty notice, having your vehicle seized and possibly destroyed, and being liable for claims costs if involved in an accident.”

“While an offer of cheap car insurance may seem tempting, falling victim to ‘Ghost Broking’ will end up costing you far more in the long run – both in terms of money and your license.” - Detective Chief Inspector Andy Fyfe, Head of the City of London Police’s Insurance Fraud Enforcement Department (IFED).

YouGov survey results (commissioned by IFB) reveal that one in five people have seen suspicious car insurance ads on social media, with one in three being in the 18-24 age group.

Consumers are advised if buying through an Insurance Broker to 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).

It’s also recommended to check that the seller has a legitimate website, a UK phone number and address and to look out for any behaviour that may seem out of the ordinary.

Members of the public can report suspected insurance fraud via IFB’s CheatLine service through a confidential phoneline that is powered by Crimestoppers on 0800 422 0421 or insurance fraud can be reported online on IFB’s website.