Business

Insurers warn of 'ghost brokers'

Smashed front of car Image copyright Thinkstock
Image caption Drivers could be landed with a big bill after an accident

Motorists should steer clear of cheap insurance deals sold in pubs, clubs, campuses and on questionable websites, a trade body has said.

So-called "ghost brokers" sell cheap, but bogus, motor insurance policies, leaving drivers at risk of big bills following accidents.

Some 26 cases are being investigated by the industry's team studying large-scale operations.

Similar ghost sales are being seen in other industries.

Checks

The Association of British Insurers (ABI) said that unauthorised insurance advisers were touting for business in pubs and clubs.

They also advertised in some newsagents, via social media, and on "professional-looking" websites.

Drivers may be tempted by the cheap prices being offered, but policies were often invalid. This put them at risk of having their vehicles seized or facing prosecution, especially following an accident.

The ABI suggests that drivers shop around for a good deal, but check the authorisation and reputation of the provider.

Useful websites include the Motor Insurers' Bureau's Motor Insurance Database and the Financial Services Register.

More widespread?

The concept of ghost broking is not limited to insurance.

Evidence in the US points to individuals selling cheap airline tickets, some of which are bought on stolen credit cards.

The seller has disappeared by the time the traveller realises the ticket is invalid.

Nick Mothershaw, director of identity and fraud solutions at Experian, said his team helped insurers and others to identify how and where fraudsters were operating.

For example, they can pinpoint when multiple transactions have come from the same device, or when the same address has been used numerous times.

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