It might sound a bit supernatural, but unfortunately phantom car insurance is turning out to be a very real problem for young people today.
So called ghost brokers are tricking drivers into buying fake insurance policies. Shopping around online is usually advised when seeking a new insurance policy, but it can get you into trouble, thanks to these unscrupulous fraudsters.
Conmen pose as real insurance brokers, offering cut-price deals on insurance.
And it is young drivers who are most likely to fall victim to these scams. Inexperienced in insurance matters and often getting their first learner or provisional policy, young drivers are also most likely to be attracted to cheaper deals as they often face the highest insurance costs and are looking to save money.
The most crude form of fraud involves the creation of false insurance documents. This can be spotted the most easily, but more sophisticated techniques are also in use.
Ghost brokers sometimes take out a genuine policy on behalf of their customer, arranging for the certificate to be sent to the firm. While the customer will believe they have now been covered for the year, the broker then cancels the policy and pockets the refunded cash.
Scams are also carried out by ghost brokers who take out genuine policies, but change or falsify some of the information to get a lower premium. They then profit from the difference in price paid by the customer and to the insurer.
Duped drivers not only lose their money, but risk fines and penalty points for driving without insurance. If the police catch you, you could face fines of up to £5,000, up to eight penalty points on their licence and in some circumstances an instant driving ban.
Drivers taking out new car insurance policies should be extra vigilant to make sure they are getting a genuine product. Go direct to an insurer and make sure to call and check that the firm has received your money if you are going through a broker.
You can check whether your vehicle is actually insured through the motor insurance database – askMID.com. Do it more than once, in case your policy has for any reason been cancelled.
Have a look at a police video warning about car insurance scams.