Social media a ‘hunting ground’ for insurance scammers as fraud cases surge

One Sure Insurance has warned that social media has become a “hunting ground” for scammers as figures revealed that fraud cases surged during the last financial year.

In a statement released yesterday (11 October 2023), the insurer said an analysis of Office for National Statistics (ONS) data was “concerning” as it showed that cases have more than doubled since the pandemic.

The figures, which were released by the ONS earlier this year (22 September 2023), showed that 21,149 insurance fraud offences were referred to the National Fraud Intelligence Bureau (NFIB) between April 2022 and March 2023.

This number remains higher than pre-Covid levels, which hovered at around 10,278 cases from April 2019 to March 2020.

Chris Lear, managing director of the insurer, said the rise was, in part, due to an increase in the number of ghost brokers.

Ghost brokers are individuals or organised criminal gangs who sell forged or invalid insurance policies to consumers.

Typically, these policies are obtained fraudulently by using false information in the application process.

“Fraudsters use numerous methods to deceive people into giving them money, and social media has become their hunting ground,” Lear said.

“We’ve noticed an unfortunate increase in ghost brokers online. These scammers masquerade as insurance brokers on social media to sell fake policies at cheap prices that are too good to be true.

”This leaves many victims believing they’re covered when their policy is non-existent.

“The consequences of this are far-reaching. Honest policyholders often bear the burden through increased premiums, making insurance less affordable for those who genuinely need it.

“With motor insurance, victims of fraud are often unaware that they’re driving uninsured until the police stop them.”

Reporting

While ONS data showed fraud was on the rise, One Sure warned that the full extent of the problem may not be known due to underreporting.

Data showed that only 43% of fraud victims reported crimes between April 2022 and 2023, with 18.9% believing that some cases were too trivial or not worth reporting.

Meanwhile, some 11.8% considered it a private matter and tried to resolve the situation themselves.

“We can’t recommend enough the importance of reporting fraudulent activity as soon as possible,” Lear said.

“Your report may help prevent someone else from becoming a scammer’s next victim.”