Something that you need to consider when buying a new or used car is the insurance - this makes sure that you are covered should you have an accident on the road, it is also a legal requirement. A new phenomenon is making its way around the internet though, and it’s something that all drivers should be aware of - ghost broking. So, what is ghost broking and what can you do to prevent yourself from getting caught out when you’re taking out insurance? Take a look at our guidance below.
What is ghost broking?
When looking around for car insurance, you might be thinking ‘how much is car insurance,’ and more to the point, you may wonder what car insurance costs in the UK. It can be tempting to go with the cheapest deal available, and while it is a good idea to shop around with the legitimate insurance companies that are out there, some companies that exist solely to scam you. Ghost broking refers to companies that are selling drivers fake insurance policies - if you had an accident and needed to claim through the insurance, the policy would be invalid and there’d be no way to resolve your claim. This means that not only would you be driving your car illegally (through no fault of your own), but you would have to pay costs on repairs or a new vehicle yourself. If you were pulled over by the police, you would then be in trouble.
The Insurance Fraud Bureau (IFB) classifies these policies as either:
- Being bought from a legitimate insurance company, but then doctored and changed to be sold to unsuspecting drivers.
- Forged replicas of the policy that do not exist.
How do ghost brokers get the policies from insurance companies?
When scammers begin their process of criminal activity, they will contact legitimate insurance companies to buy a policy off them at a cheaper price. They’ll use fake details to get the cheaper deals, which may include incorrect addresses, dates of birth or driving history to ensure they are offered lower premiums. If you ever think you are being scammed, or suspect fraud or what could be viewed as fraudulent activity, report it to the police. To ensure that they aren’t looked into thoroughly, though, they may go as far as to use a legitimate business address to get a policy, with you being added onto it as an additional driver. Another method they use is to buy a lot of policies using stolen bank details and then sell them on. It’s essential that you check over any documentation thoroughly to ensure that all information is correct and there are no discrepancies.
What happens if I buy a fake policy?
If you have a fake insurance then it means you aren’t covered by any policy and essentially, you aren’t insured at all - which is against the law. Driving without insurance means you face legal punishment, such as police seizing your vehicle, a fixed penalty notice of £300 or taking full responsibility if you are involved in an accident where someone is injured. This means you will have to pay hefty compensation should the other driver claim. To get your car back from the police, you need to buy insurance from a legitimate company (with proof) and you may need to pay at least £150 if the vehicle has been taken off you.
How can I make sure I’ve bought my insurance from a legitimate source?
To ensure that the policy you have bought is legitimate, you can do one of three things:
- Speak to your insurer to ensure all of your details are correct and that the policy details are correct.
- Ensure that the broker you’ve used is licenced - you can do this through the Financial Conduct Authority (FCA).
- You can check that your details are all correct by visiting the Motor Insurers Bureau.
As we’ve mentioned before, Ghost brokers tend to use random home addresses to buy policies. If your address is one they’re using, it could mean issues for you getting insurance or even credit in the future.
Vehicle buying scams are popular, but we’d rather that not be the case. Often, scammers may appear on places such as Facebook marketplace and could be a breeding ground for car scams. Fraud prevention is sometimes hard to do when you are wanting to purchase car insurance - you might get blindsided with a really nice offer and think its above board. It is best to be vigilant in cases such as this.
If you start to notice letters are being sent to your home but aren't addressed to you and it contains insurance documents, you need to get in touch with the insurance company it’s coming from and speak to their fraud department.
Buy a new or used car with Swansway
If you’re looking for a new or used car, then look no further than Swansway - we have a huge range of new and used vehicles ready to be viewed and test driven today. From Honda to Audi, there’s something for everyone, no matter your needs or lifestyle. Before you buy the car, you should ensure that you have your insurance policy in place, so that it’s ready to go when you buy the car. As soon as you’ve completed the sale, your insurance will be good to go! If you’re unsure what you're looking for or would like more information about one of the vehicles you see on our website, don’t hesitate to get in touch with one of our team and we’d be happy to help you.