Direct Line Car Insurance is warning consumers not to be scammed into buying worthless fake car insurance policies, after new analysis¹ reveals it takes just ten seconds to find an insurance scammer, known as a ghost broker, on social media fraudulently claiming to sell fully comprehensive car insurance from companies such as Admiral, Hastings Direct, AVIVA and Churchill.

The insurer is leading the fight against these fraudsters, who specifically target vulnerable consumers, through major social media sites.  Direct Line reports that by working with these social media platforms to delete accounts that were fraudulently targeting consumers using its brand, it has now assisted in the closure of over 500.  Direct Line continues to work together with social media companies to proactively search and delete these insurance scams.

Steve Barrett, head of motor insurance at Direct Line, commented: “Social media platforms are being targeted by these scam artists, and it is important we continue to work together to protect consumers from being misled into buying a worthless car insurance policy. Fraud adds £50 to the insurance premiums of honest customers, so for every person who mistakenly thinks they save money using a ghost broker;  everyone else pays more.

“Consumers need to be beware when responding to adverts and profiles that appear ‘too good to be true’ on social media, as they could find themselves a victim of fraud, losing money and potentially facing criminal charges. Whilst insurers are doing all they can to spot these fake accounts to protect honest policyholders, drivers may only find out they have been scammed when they come to make a claim or if pulled over for a random police check.”

One ghost broker identified promises that they “100% use a client’s details” to secure fully comprehensive insurance yet are also offering the first five people to contact them a car insurance policy for just £200, which is impossible to guarantee.  Ghost brokers will sell fraudulent insurance policies that never exist, use false information to secure a policy in someone’s name, or even buy a legitimate policy only to then cancel it, pocketing the refund.  Many of these scam artists also promise “£50 to refer a friend” to attract even more victims to their scams.

To try and avoid detection and the tracing of payments ghost brokers are using messaging apps, where messages are encrypted to communicate with vulnerable consumers, and requesting payment in cryptocurrency.

Barrett continues: “We proactively engage with social media owners, identifying ghost brokers and petitioning for the removal of these pages to protect the public.  We also have stringent processes in place to identify potentially fraudulent insurance applications.  Anyone we suspect of operating as a ghost broker will be reported immediately to the authorities.”

It is illegal to drive without valid insurance and drivers caught by the police, whose policy is fraudulent or has been cancelled without their knowledge, risk a fixed penalty of £300 and six penalty points on their licence².  If the case goes to court a driver can face an unlimited fine and be disqualified from driving.

Advice for consumers:

• The policy holder is responsible for the information provided in their application, if a the information given is not accurate,  their insurance will be invalid.
• Only purchase motor insurance from reputable sources, Direct Line doesn’t sell through brokers. Policies can only be purchased direct via the website or telephone
• Official social media accounts on major platforms have a blue tick, So avoid those accounts that don’t have one
• Steer clear, if a ‘Broker’ only uses a mobile number or has no business premises or uses personal sounding email address (i.e. no company affiliation)
• Contact the insurer directly if going through a broker to check if they are authorised to sell policies on the company’s behalf or check them out at biba.org.uk or register.fca.org.uk
• Adverts promising insurance for a fixed price without having any details of your personal situation or the vehicle you are seeking to insure are likely to be fraudulent
• Reviews – if these feature screengrabs of text messages, they are extremely likely to be fake
• Check the language – if communications include text such as “you can’t believe how cheap it is bro” and “totally legit not a scam mate” – it probably is fraudulent
• Intuition – ask yourself if the deal appears ‘too good to be true’, does the website or social media page appear reputable?

How to check you’re not a victim:

• Check if the Broker is registered with FCA and/or BIBA
• Check your details with the insurer you have been informed you are insured with
• Check if your car is insured online via www.askMID.com

What a consumer should do if they think it’s a scam:

• Report to Action Fraud: 0300 123 2040
• Contact Insurance Fraud Bureau (IFB) Cheatline – 0800 422 0421