A Fareham student who fell for a fake ad on Facebook is £1,200 out of pocket after she was fraudulently sold counterfeit car insurance by a ‘ghost’ online insurance broker.
Allison Moran thought she was driving a hard bargain when the initial quote of £2,600 to insure her Ford KA was slashed to just £1,200.
But the eighteen-year-old Southampton university sociology student had no idea she had been targeted by ruthless online insurance bandits leaving her driving around uninsured for more than five months.
A subsequent investigation by Streetwise has revealed online insurance fraud aimed at new young drivers has become a serious problem.
Insurance underwriters deem drivers under 25 accident prone, and compel them to pay sky high premiums
We found Allison was typical of newly qualified motorists on limited budgets who fork out enormous monthly payments just to drive their cars.
‘As soon as I went online and started browsing around for cheaper insurance I was directed to Facebook and other websites that came up where you fill in your details and companies call you back with a quote, ‘ she said.
‘It was incredible how many offers of heavily discounted car insurance appeared on student websites as well as Twitter, Google ads, and Instagram.
‘I asked around my student friends what they thought about it and was re-assured when one said her sister who’d just passed her test got an amazing cut price deal from an on line broker.
‘But when I received the call back from a person claiming he was legitimate insurance middle man and could cut my premium by almost half I was initially wary.
‘It was just so cheap and the warning lights about too good to be true began to flash. I was naturally suspicious at first, especially as I had to make such a large up front payment.
‘But I was reassured when I received an email confirmation claiming the insurance would be obtained by an insider who could get staff discounts and it was all perfectly above board.
‘Perhaps I shouldn’t have cast aside my nagging doubts when they resurfaced after I was told because it was an insider deal a payment cheque in my name wasn’t acceptable. I had to pay up front by bank transfer.
‘That should have been a real red light moment, but it all looked so convincingly legit when they emailed me the policy details, the cover note came through without a hitch, and the insurance certificate duly arrived by post a week or so later.
‘It all happened beck in February, and I didn’t give it a second thought until a few weeks ago when someone carelessly backed into my car at Tesco North Harbour.
‘Although the damage was relatively minor, we exchanged insurance details and I rang Churchill who I understood was my insurer a few days later to put in a no fault claim.
‘You could have knocked me down with a feather when I was told there was no trace of the policy and I’d been driving around without insource for months.
‘When it sank in I was so angry and upset. I just had to email Streetwise to investigate and warn others about how easily I’d been tricked into buying the fake insurance.’
Following Allison’s initial trail we first got onto the original website but a blog page warning immediately came up confirming it was a scam.
We then checked the location of the ghost broker’s website via the IP address which turned out to be somewhere in the west midlands. Insurers L V= confirmed the bogus broker had falsified her details to bring the price down.
He’d applied for and bought the policy online and after misrepresenting her personal details cancelled it for a refund during the 14 day cooling off period.
Western Union, who transferred Allison’s money, had no better news. The fraudster used false credentials immediately closing the account and scarpering with the proceeds.
Reluctantly we had to admit to Allison we’d come to the end of the road, and there was no way open to us to recover her money. All she could do is to report the incident to Action Fraud, the national fraud reporting centre and the Insurance Fraud Bureau (IFB) and let them take it from there.
Jason Potter, head of investigations at the (IFB) confirmed Allison’s experience was becoming all too prevalent.
‘This is a rising problem,’ he warned. ‘Since 2015 the number of new investigations into application fraud has increased by 67%. The IFB is committed to working with the industry and enforcement in order to clamp down on this serious issue and bring these fraudsters to justice.
‘As a result of these scams policyholders can often be left driving uninsured, with the cost being far greater than having to replace their fake policy with a legitimate one.
‘If you’re caught driving uninsured it can result in your car being seized by police, a penalty of £300, as well as the cost of getting your car back from the pound. Not to mention if you were involved in an accident you could be liable for any damage or injury compensation.
‘Members of the public need to be aware of these scams and only buy their insurance direct from an insurer. They should beware of buying insurance from unusual sources, such as social networks, newsagents, pubs and bars.
‘If you think you’ve been a victim of a ghost broker or have information relating to a ghost broking scam report it to the IFB’s Cheat line either online or by calling 0800 422 0421.
Allison was resigned to the fact she’d seen the last of her money.
‘I can’t thank Streetwise enough for looking into the matter for me. I never thought I could be that stupid to be taken for a mug but there you go. I’ve written the matter off to experience. ‘I’m just glad that you’ve given me the opportunity to warn others.’