More needs to be done to tackle uptick in social media scams – Ifed

While the drivers of insurance fraud remain broadly unchanged, the technological drivers enabling ghost broking in the UK have evolved, according to Tom Hill, detective chief inspector at the City of London Police’s Insurance Fraud Enforcement Department (Ifed).

Hill was speaking at the Verisk Insurance Conference London 2024 on 5 September, delivering a keynote session entitled The evolution of the fraudster.

He told delegates: ”The drivers of fraud – greed, motivation and circumstances – have not changed. What has changed are the technological drivers that now facilitate it.

“Reported fraud cases increased by 8% last year, with most fraud now being cyber enabled.”

For example, Hill added that “social media is increasingly used to facilitate fraud and target vulnerable individuals”, contributing to a 17% rise in fraud cases linked to these platforms.

Hill’s insight is supported by figures from the Insurance Fraud Bureau (IFB), published on 24 July 2024, which found that the number of people who fell victim to ghost brokers on social media increased by 6% last year.

The IFB defined a ghost broker as a fraudster or criminal gang that pretends to be a genuine insurance broker in order to sell fraudulent insurance, such as fake or invalid insurance policies.

A recent example of this type of fraud was reported by Ifed in July 2024, where ghost broker Wahidullah Usmani was found to have made made £17,618 by selling invalid car insurance policies on social media site Instagram.

“What my team is seeing is that social media is a major driver of fraud,” Hill added.

Hill continued by explaining that social media is also driving more frequent romance fraud, thanks to the number of virtual dating apps now on the market.

This type of fraud was highlighted by the Netflix documentary The Tinder Swindler, which was released in April 2022.

The documentary followed Simon Leviev, who allegedly defrauded several women he met through online dating site Tinder of approximately $10m (£7.9m).

Challenges

However, Hill noted that resource limitations continue to be a challenge for the police when it comes to tackling the increasing number of social media linked fraud cases.

He explained: “All fraud is reported centrally and then it’s up to territorial police forces and agencies in the UK to actually investigate that crime. They have many competing priorities and cannot always investigate it, so that’s the challenge.”

Hill added that addressing the “profiles of insurance fraudsters is challenging” too because social media companies often “do not prioritise online fraud”, making it difficult to gain traction in tackling the issue.

However, this is where the Online Safety Act 2023 comes in. Effective from October 2023, the act includes protections for consumers against fraudulent advertising, the impersonation of legitimate businesses and unlicensed financial promotions.

The act requires social media platforms to put systems in place to prevent or minimise spoof ads online and remove them where possible.

Hill concluded: “I hope the Online Safety Act will facilitate some progress in [prioritising fraud].”