The most cost effective automobile insurance coverage premium 22-year-old Lizzie can discover utilizing a comparability website is £2,680. It’s not shocking that her quotes are excessive, although.
The catering assistant from Leeds has solely two years of driving expertise and three factors on her licence for dashing.
So when she is obtainable cowl for her Seat Leon FR for simply £860.63, it sounds too good to be true. And it’s.
Undercover: Cash Mail reporter Fiona Parker (pictured) posed as a 22-year-old driver struggling to search out inexpensive motor insurance coverage
The quote has come from a ‘ghost dealer’ promoting nugatory automobile insurance coverage on social media website Instagram.
The crooks lure in motorists with presents resembling ‘70 laptop reductions’ and assure to insure drivers at rock-bottom costs.
However the insurance coverage rip-off leaves victims uninsured and vulnerable to hefty fines and even a driving ban.
The fraud, which investigators say is hovering, can also be including round £50 to the price of all insurance policies as corporations recoup losses.
Internet of lies
Whereas ghost brokers used to submit flyers in phone bins or method victims in pubs, they’re now touting for enterprise on social media websites resembling lnstagram, Fb and Twitter.
In some circumstances the scammers will simply pocket the cash and ship pretend paperwork to the client.
In others they’ll method insurers for quotes, however present falsified particulars to get a less expensive deal. This implies the coverage can be invalid ought to the client ever want to say.
Rip-off: A ghost dealer on Instagram providing low-cost automobile insurance coverage
A fast seek for ‘low-cost automobile insurance coverage’ on Instagram yielded dozens of outcomes.
Posing as ‘Lizzie’, I discover a dealer utilizing the identify @car_insurance_specialists. The account has almost 2,000 followers and guarantees to ‘beat your present quote by round 50 per cent or extra’.
However with the assistance of insurer LV=, I quickly discover the cut price worth supplied is a sham. The agency’s information specialists observe the automobile registration quantity I offered to the ghost dealer to observe any requests for quotes.
They uncover that, in a bid to drive down the value, the dealer submits particulars that differ from the knowledge I gave them.
It claims Lizzie is a married chartered accountant who lives in Cornwall, somewhat than a catering assistant from Leeds.
The dealer additionally says her common mileage is simply 4,000 miles a yr — round half of the standard quantity clocked up by UK drivers.
It implies that if ‘Lizzie’ had bought this coverage, her insurance coverage can be invalid and he or she might face a invoice of 1000’s of kilos if her automobile was stolen or broken.
Police can even seize and crush uninsured vehicles and slap homeowners with a £300 superb and 6 factors on their licence.
Insurance coverage crooks are luring in motorists with engaging presents resembling ‘70% reductions’, ‘£100 referral charges’ and ensures to insure younger drivers at all-time low costs
Instagram sham
One other Instagram account referred to as @Matrix.insurance coverage, which has 1,500 followers, presents ‘Lizzie’ cowl for £1,356.
There’s a £200 admin payment — however even as soon as that is added it’s nonetheless a £1,124 saving on the most effective comparability website deal of £2,680.
The individual working the account says that if I don’t enroll inside 48 hours, the premium will soar. ‘All quotes from Saturday are developing triple — £3.6k plus.’ But specialists say costs wouldn’t abruptly improve on this means.
A fast test on the Metropolis watchdog’s web site (register.fca.org.uk) reveals that the Instagram brokers usually are not registered with the Monetary Conduct Authority, which is a authorized requirement.
No cowl: The insurance coverage scams go away victims uninsured and vulnerable to hefty fines and even a driving ban
Surge in fraud
Previously yr alone, 21,000 fraudulent motor insurance policies had been reported to the Insurance coverage Fraud Bureau — almost 60 every single day. The organisation says ghost-broking scams now account for 1 / 4 of its investigations, up from one in eight in 2016.
The variety of ghost brokers uncovered by insurer LV= has jumped by two thirds over the previous two years. It at the moment has 20 open organised fraud inquiries, totalling £2 million.
Insurers nonetheless should pay for a 3rd celebration’s broken automobile even when a driver has given them false particulars. Corporations can attempt to declare these again from the driving force, however many find yourself having to foot the invoice, and hike premiums to cowl any losses.
If the opposite driver is injured, a declare will likely be made to the Motor Insurers’ Bureau, which pays out to victims of uninsured motorists. That is funded by insurers so prices are added to premiums.
Stricter checks
Specialists say insurers may very well be doing extra to cease pretend insurance policies.
However scammers have been recognized to make use of stolen identities when making use of for canopy. Axa is at the moment investigating one ghost dealer that makes use of names and addresses of actual individuals to safe insurance policies.
James Blackham, chief govt of insurer By Miles, says: ‘We wish to see social media corporations looking for and eradicating ghost brokers on their platforms at this time, and never simply look ahead to laws to implement this.’
An Instagram spokesman says: ‘Fraudulent exercise is just not allowed on Instagram and now we have eliminated the accounts delivered to our consideration. We’re dedicating vital sources to deal with this industry-wide difficulty.’
f.parker@dailymail.co.uk