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Online Fraud

Online insurance and investment fraud can be hard to spot. Find out the various types and tactics scammers use and how you can protect yourself when online.

Paid Ad Spoofing 

Paid Ad Spoofing involves scammers who use paid advert spoof websites to appear at the top of search engines usually to trick drivers into thinking they will be directed to the website of the genuine insurer. Scammers target motorists when they’re most vulnerable after road traffic accidents. When a driver uses their smartphone to start initiating a claim from the roadside, they may be directed to the website of an unscrupulous firm instead of their insurer.  Scammers will ask for personal details to provide ‘support services’ and potentially make a claim. They use psychological tactics to befriend, reassure and pressure victims, while all the time collecting personal information for financial gain.  

The impact: 

These scams can have a significant and wide-ranging impact, not least because the victims believe that their car insurance will cover any costs, but because they are not dealing with their insurer, significant fees may be incurred.  

  • If the other driver is at fault, then the third-party firm will claim against that driver who may not realise that the claim is linked to a scam.  
  • If the other driver is not at fault, you could be liable for paying these costs which may include car recovery storage and rental of a courtesy car.   

How to protect yourself: 

  • Consumers must be vigilant when searching for their insurer online. Check the phone number and website URL on any ads to help ensure it is legitimate, before sharing personal information and agreeing to claims services.  
  • Keep your insurer’s contact details on your phone or written down somewhere secure.      

Investment Fraud 

These scams occur when someone is looking to invest their money and is duped into thinking they are purchasing a genuine product from a reputable brand. The scammers will often clone legitimate websites, including using real employee names, to further convince people it is real. 

The impact: 

  • What could be significant financial loss 
  • Grave emotional distress 

How to protect yourself: 

  • If you’re approached about an investment opportunity – whether that’s online, on social media or over the phone – reject them. Be wary even if you initiated the contact.   
  • Be sure to always check the FCA Register to make sure the firm you are dealing with is authorised. You can also check the FCA Warning List of firms to avoid. 
  • When contacting firms, only use the phone number and email address available on the FCA Register. Don’t use the ones provided by the firms, and check for any differences. 
  • Consider seeking impartial advice before making any investments 

Ghost Broking 

Ghost broking covers a range of tactics used by scammers to sell fraudulent insurance policies. It is typically carried out on social media platforms, such as Instagram, Facebook and TikTok, with fraudsters enticing victims by advertising ‘discounted’ but fraudulent motor insurance policies.  

Ghost broking is typically carried out in one of three ways: 

  • fraudsters will either forge insurance documents 
  • falsify details to reduce the premium,  
  • or take out a genuine policy before cancelling it soon after and claiming the premium refund plus the victim’s money 

The impact: 

Many people who have fallen victim to a ghost broker, won’t realise their policy isn’t genuine until they’re stopped by the police or try to make a claim. 

If you buy a policy from a ghost broker you could be liable for claim costs, have to pay a penalty notice, have points added to your licence, and your car may be seized. 

How to protect yourself: 

  • If it looks too good to be true, it probably is 
  • Use the FCA’s Financial Services Register to check if an insurance broker is authorised, or the British Insurance Brokers’ Association to see if they have registered with them 
  • Beware of offers advertised on social media 
  • Look out for ‘brokers’ who provide a mobile number, a messaging app, or a Gmail, Yahoo, Outlook or Hotmail email address as their primary means of contact 
  • You can check the British Insurance Brokers’ Association website for a list of all authorised insurance brokers: biba.org.uk 
  • You can also contact the insurance company directly to verify the broker’s details. 

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

How to Report Fraud

Whether you’ve seen something suspicious or been a victim of fraud, you should always report it. Providing details of what happened will help the police crackdown on the criminals and could prevent the same thing happening to others. Information on how to report fraud can be found here: https://stopthinkfraud.campaign.gov.uk/reporting-fraud/