Up To 400 Motor Insurance Policies Sold By Ghost Brokers
Aviva Insurance has revealed that up to 400 of its motor insurance policies have been sold by "ghosts".
These fake brokers, also known as ghost brokers sell cheap motor insurance policies to unsuspecting individuals through social media channels, mainly through Facebook.
Not only are these fake policies but consumers are losing out and losing cash to criminals. They not only get scammed but they also have to fork out for a legitimate motor insurance policy, before they can even drive.
These fraudsters can be quite ingenious and they will even create pages which look like bone fide insurance brokers with insurance company logos.
So how does the scam work? Well, a real policy is purchased from a legitimate company like Aviva using a cloned or fake credit card.
In a lot of cases, the Ghost Broker will but a genuine car insurance policy from a legitimate insurance company but they will give false or inaccurate customer information. For example, the ghost broker will alter their victim's information on the proposal form and will ignore liabilities such as penalty points, or they will cut the car's value so that a cheaper quote is forthcoming. They then ask for the full insurance fee be paid upfront but unbeknownst to the customer. They are not covered because "material facts" were wrong.
The scammers usually target Inexperienced drivers who are attracted by the promise of cheaper cover. They also target foreign nationals as well who are unfamiliar with how motor insurance works in Ireland. These criminals lurk the online forums and will spot foreigners looking for advice. They make contact claiming to be a broker and offering cheap car insurance.
The unsuspecting victim pays a full year's premium up front to get a discount (usually half of what the actual premium would be), but it's demanded via Western Union or money transfer to the fraudulent broker.
The fake credit card is then spotted by the insurance company and the policy cancelled. But it's too late for the motorist when they get the letter telling them they've been scammed. They then have to fork out for a proper policy.
Other scams aimed at drivers include:
Fake No-Claims Bonus Certificates
Some motorist may actively participate in scams by negotiating with fraudsters to purchase fake no-claims bonus certificates for example.
Fake no-claims bonus certs may get you cheaper insurance, especially if you have made claims in the last five years but if you are in an accident or you are stopped by Gardaí, it will be spotted.
These fake no claims bonus certs can be bought on the black market for around €300 but they are a false economy. Not only is it a fake document but it is also a criminal offence.
How To Spot A Scam?
With motor policy terms and conditions not that easy to understand, young, inexperienced and foreign drivers are most at risk of defrauding by scammers.
Legitimate brokers do not meet in social media forums, car parks or demand money transfers online or private messaging offline.
Insurance companies do not generally offer 50 per cent off the price of motor insurance so if it looks too good to be true, it probably is. Most real discounts hover around 5-10pc and there are plenty of ways you can get the price down, such as a higher excess, third-party cover, paying annually instead of monthly or bundling home and car insurance.
l You can check a broker is legitimate as they must be registered by the Central Bank of Ireland. They'll be noted on the broker register (registers.centralbank.ie) or you can call Brokers Ireland on (01) 6613067.
Keep an eye on your bank statements also, as if you notice a strange payment appearing from a legitimate source like an insurance company, it's possible that your credit card was cloned. Don't assume you must have a policy somewhere so make sure to check.