The IFB’s head of intelligence and investigations said ghost brokers ’are not afraid to take advantage of the financial hardship so many drivers are facing right now’
The City of London Police’s Insurance Fraud Enforcement Department (IFED) is cracking down on ghost broking across the UK, making seven arrests while executing 10 warrants last week.
The arrests form part of a dedicated week of action against ghost broking, which was led by IFED - a specialist police unit that tackles insurance fraud.
Ghost broking is a common tactic used by fraudsters to sell fake car insurance.
Detective chief inspector Edelle Michaels, head of IFED, said: “This week of action has been a stark reminder of the immoral tactics that ghost brokers use to defraud members of the public, including one man who used his family and friends to refer his illicit services to others.
“It has also reinforced the fact that not all ghost brokers look or act the same. We have seen people in their early 20s advertising fraudulent services via sophisticated social media campaigns, to 40-something-year-olds keeping track of their fraudulent policies through handwritten accounts.
”We even came across a car dealer using his knowledge of the motor industry and customer relationships to deceive clients into purchasing fraudulent policies.”
Posing as insurance middlemen
Officers were deployed across 11 operations in London, Essex, West Yorkshire, Bristol, West Midlands, Derbyshire and Wales between 28 June to 2 July 2021. This acton resulted in the following arrests:
- A 44-year-old man was arrested in Barking on suspicion of fraud by false representation and money laundering.
- A 26-year-old man was arrested in Chelmsford on suspicion of fraud by false representation.
- A 47-year-old man was arrested in Croydon on suspicion of fraud by false representation.
- A 36-year-old man was arrested in Bradford on suspicion of fraud by false representation and conspiracy to defraud.
- A 66-year-old woman was arrested in Bradford on suspicion of conspiracy to defraud and money laundering.
- A 36-year-old man was arrested in Bristol on suspicion of fraud by false representation.
- A 22-year-old man was arrested in East London on suspicion of fraud by false representation.
The arrested suspects are thought to have posed as middlemen for insurance companies, claiming to offer legitimate car insurance at a significantly cheaper price.
The policies offered are invalid or fraudulent due to fraudsters forging insurance documents, falsifying details to bring the price down, or taking out a genuine policy but cancelling it soon after.
Most victims do not realise they do not have genuine cover until they are stopped by police or attempt to make a claim.
During the aforementioned operations, officers seized over one hundred pieces of evidence during fourteen searches, including fake no claims bonus discount forms, notebooks with handwritten details of victims and the associated fraudulent policies and thousands of pounds worth of cash.
At one property in Bradford, officers uncovered a car boot filled with hundreds of insurance certificates in various names.
Michaels added: “The varied face of ghost broking means the public should always be cautious and wary when purchasing insurance. Ask yourself: is the person you are dealing with really who they say they are? If you are not sure, check the list of authorised brokers at FCA or Biba.”
Further operational activity across the week saw five cease and desist notices served.
These notices are served in person by officers, informing the individual that their activity is illegal and ordering them to stop immediately.
The use of cease and desist is a tactic to educate those who may not realise that their actions are illegal.
The unit will continue to monitor suspects that have been served notices and take further action if necessary.
Collaborative work
The enforcement week also included IFED working closely with the Insurance Fraud Bureau (IFB) and social media companies to take down accounts advertising fraudulent broker services.
Stephen Dalton, head of intelligence and investigations at the IFB, said: “Sadly, ghost broker scammers are not afraid to take advantage of the financial hardship so many drivers are facing right now.
”With unrealistically cheap yet completely fake car insurance deals being sold across social media, it’s concerning to think there may be many young and vulnerable victims being left out of pocket and potentially facing prosecution for driving without insurance.
“In what has been a significant week of progress, I’m pleased to share that our intelligence and investigations experts have helped IFED to disrupt a considerable number of organised ghost broking scam networks, which will help to prevent further victims of fraud.
”The IFB will continue its collaboration with the police and insurers to bring all those responsible for these scams to justice.”
The collaborative efforts of IFED officers, the IFB and social media companies has seen nearly 80 entities put forward for removal this week.
To coincide with the week of action, IFED also ran an awareness campaign across social media channels and other platforms, educating the public on how they can protect themselves from ghost broking fraud.
This campaign was supported by the insurance industry, as well as community-based media outlets that may have readers who are a target for ghost brokers.
James Dalton, director of general insurance policy at the ABI, said: “To help avoid falling victim to a ghost broking scam, I encourage anyone looking for car insurance online to be vigilant and to carry out essential checks before making a purchase.
“This crackdown shows that there is no hiding place for these criminals. Whether you are an innocent victim or knowingly take out fake motor insurance, the result is the same – you will be driving illegally with an increasing chance of being caught and getting a criminal record, as well as higher costs for purchasing legitimate motor cover.
“Deals that seem too good to be true often are, so play it safe and stay legal by checking that your cover is genuine.”
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