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Fraudulent insurance policies

Fraud

Fraudulent insurance policies are sold by illegal insurance advisers, commonly known as ghost brokers. This is someone who offers you a cheap deal on your motor insurance by providing you with seemingly genuine insurance documents that make you think that your vehicle is insured. But in reality, victims are left unknowingly driving around without insurance.

Fraudulent motor insurance policies are mainly sold in two ways:

  • genuine policies are bought from legitimate insurance companies using false information and then doctored before being sold on to customers
  • fake policy documents, often bearing the logo of legitimate insurance companies are created and sold on to customers

Customers often only find that their policies are fraudulent if:

  • they are stopped by the police for driving uninsured
  • they go to make a claim from their insurer

If you buy a fraudulent policy through an illegal insurance adviser you may find that:

  • your insurance is invalid and you are driving illegally
  • you may incur a fine and 6 penalty points on your driving licence
  • you are unable to make a claim
  • you may have your vehicle seized and have to pay a fee to get it released from the pound (else the vehicle may be crushed)
  • you may be forced to pay costs which could run to millions of pounds if, for example, you were at fault for a crash in which a third party was injured 
  • you have to pay for another, genuine policy

If you suspect you have bought a fraudulent insurance policy:

Check if your policy (with the correct details) is listed on the Motor Insurers’ Bureau’s Motor Insurance Database, which records the policy details of all vehicles insured in the UK.

If your vehicle is not listed on the database your policy is not legitimate.

Even if your vehicle is listed on the database you should contact your insurer to make sure that your policy is legitimate. If your personal details do not match the information held by your insurer you may have been sold a fraudulent policy.

In either case, you should report the company you bought your policy from to the police, by contacting Action Fraud at http://www.actionfraud.police.uk/ or by calling 0300 123 2040.

How to avoid illegal insurance advisers:

Use the Financial Conduct Authority’s Financial Services Register to check if an insurance broker is authorised.

Beware of insurance policies sold via:

  • social networking websites
  • pubs, clubs and bars
  • newsagents
  • motor repair shops

Watch out for “brokers” who provide a mobile phone number or a Gmail, Yahoo, Outlook or Hotmail email address as their primary means of contact.

Reporting insurance fraud:

If you have information about ghost brokering activity, contact the Insurance Fraud Bureau (IFB) Cheatline by calling 0800 422 0421 or by filling out a form on the IFB’s website.