Drivers have been warned of a fraudulent car insurance practice creeping across the UK, which could leave thousands out of pocket.
The practice known as "ghost broking" targets motorists across the UK with counterfeit vehicle coverage in a bid to secure premium fees without providing any legal cover.
Experts have now issued guidance after major insurer Aviva uncovered almost 7,000 instances connected to ongoing ghost broking and application fraud enquiries during the previous year.
These scammers operate by impersonating genuine insurance firms or intermediaries, presenting motorists with attractively priced but ultimately worthless policies.
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The fraudsters typically hunt for victims across social sites, online marketplaces, discussion boards and various digital platforms, seeking individuals searching for affordable coverage.
Tom Banks, representing Go.Compare's vehicle insurance division cautioned that these criminals employ sophisticated tactics to deceive unsuspecting motorists into purchasing non-existent or compromised policies.
The deception methods employed by these fraudsters fall into three primary categories, according to the comparison website's analysis.
Some ghost brokers create entirely fictitious policies, providing motorists with counterfeit documentation whilst never actually arranging any coverage whatsoever.
The false car insurance policies have left drivers vulnerable and susceptible to huge costs
| GETTY
Others genuinely purchase policies but falsify crucial information, including the driver's residential address or motoring history, to reduce premiums, subsequently charging customers inflated rates and keeping the surplus funds.
The third approach involves legitimately establishing coverage before swiftly cancelling the policy, leaving motorists unknowingly uninsured whilst retaining their payments.
Mr Banks explained: "There are a few different ways a 'ghost broker' can operate. They might pretend to take out a policy in your name, and supply you with fake documents to convince you everything is above board - while your policy doesn't exist."
Motorists should remain vigilant for several red flags that indicate potential ghost broking activity, experts advised.
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Reports revealed that 7,000 cases of ghost broking were recorded last year
| GETTYThe experts explained that suspiciously low premiums that significantly undercut established comparison websites or direct insurer quotes often signal fraudulent operations.
All authorised insurance brokers must appear on the Financial Conduct Authority's official register, making verification essential before purchasing coverage.
Mr Banks added: "If they're a legitimate insurance broker, they have to be on the FCA Register by law, so be sure to look them up." Motorists can verify their coverage status through the Motor Insurance Database for additional confirmation.
Motorists who suspect they've fallen victim to ghost broking should immediately contact the insurance company they believe holds their policy to clarify the situation, preventing potential implication in fraudulent activities.
Drivers have been targeted by ghost brokers through online and social media channels
| GETTYBut experts warned that securing legitimate replacement coverage becomes crucial as driving without valid insurance remains illegal in the UK. Under current laws, offenders caught driving without insurance could be slapped with a fixed penalty of £300 and six penalty points on their licence
Victims should file detailed reports with Action Fraud, providing comprehensive information about the fraudulent transaction.
Banks stated: "If you think you've been the victim of a ghost broker, we recommend reaching out to the car insurer you believe holds your policy and explaining the situation to them as soon as possible.
"If your insurance policy isn't legitimate, then it's important to make sure you get a new one in place immediately, as you can't legally drive your vehicle if it's uninsured."