Ghost insurance brokers

AA Insurance stops up to a dozen ghost broking attempts every day

AA Insurance stops up to a dozen ghost broking attempts every day

AA Insurance stops up to a dozen ghost broking attempts every day

‘Ghost’ car insurance brokers have become a spectre that is thought to cost the insurance industry tens of millions of pounds every year, leaving thousands of drivers without cover.

AA car insurance says that its own fraud team blocks up to a dozen attempts to obtain car insurance by suspected ‘ghost brokers’ – criminals who sell ‘cheap’ fraudulent car insurance policies – every day.

AA Insurance has welcomed a new industry initiative* to raise public awareness of the phenomenon, including an animated video warning motorists, especially young drivers, about being ripped off by fraudsters selling fake car insurance.

Fleecing vulnerable individuals

At a time when car insurance has become fiercely competitive, this is a very nasty type of insurance scam that fleeces vulnerable individuals and leaves them with useless car insurance.

Ghost brokers tend to be IT literate and understand the insurance industry well. Their scams are sophisticated and can be difficult to identify but insurers, including the AA, are making significant strides to stop them.

No one knows how many policies that appear legitimate are ghosted.  When they do come to light, the ‘broker’ will have disappeared into thin air while their customers are left with insurance cover that is no more than an apparition. 

Often the victims are landed with convictions for uninsured driving and their cars confiscated by police.

If it looks too cheap to be true...

Ghost brokers typically advertise cheap, no-quibble insurance on social websites or forums where particular groups are targeted – hard-up students, drivers with convictions, drivers newly arrived from overseas or ethnic groups for whom English isn’t the first language.

Well organised scams may even run their own websites.  Only last month a sophisticated ghost broking network run by two criminals** was smashed after taking £680,000 for worthless policies sold at 15% below the cheapest offered elsewhere.

Policies are typically bought by ghost brokers from legitimate providers but with altered details and false contact information for the customer.  They may be paid for using false or stolen credit or debit cards, sometimes issued by overseas banks, while the buyer may be asked to pay cash.

Common tactics

  • guarantees to undercut any policy by a significant percentage
  • fixed-price policies through a reputable company such as the AA
  • mobile telephone contact numbers or an unwillingness to provide contact details for the insurance company with whom the business is being placed

Simon Douglas, director of AA Insurance points out: “If a policy is significantly cheaper than polices available elsewhere, or direct from the insurer’s website, it is probably not legitimate.” 

Although they will initially appear on the industry’s Motor Insurance Database (MID)***, phantom policies usually come to light quickly and are cancelled, when they will also be taken off the MID.

If a policy is significantly cheaper than polices available elsewhere, or direct from the insurer’s website, it is probably not legitimate

Simon Douglas, director of AA Insurance

'Ghost busters'

Mr Douglas says that the industry ‘ghost busters’ are getting better at identifying criminals but the challenge for the industry is stopping the ghost brokers before transactions are completed.

"For instance, the AA has invested heavily in sophisticated technology to stop the spooks before the damage is done and runs a dedicated fraud team to stop potential ghost transactions.

“We also run a database of thousands of fraudulent attempts to buy insurance and share information with the police as well as other insurers and the banks.

“The industry is working flat-out to spread the net as widely as possible.”

The AA is a member of the Insurance Fraud Bureau (IFB), Insurance Fraud Investigators’ Group (IFIG) and co-operates with the police Insurance Fraud Enforcement Unit.

Mr Douglas also acknowledges that buyers may suspect that their policy may not be legitimate but say nothing so they can benefit from a lower premium.

Top tips

The AA offers the following tips to help avoid becoming a victim or what to do if you have:

  • Only buy from legitimate sources – if in doubt check with an industry source such as the British Insurance Brokers Association or the Motor Insurers’ Bureau.
  • Beware of adverts guaranteeing to significantly undercut company prices or offering fixed price insurance.  If the price looks too good to be true it probably is
  • Treat adverts that provide only email or mobile phone contact with suspicion
  • If you suspect you’re a victim, check to see if your car is registered as being insured. If it is, check again from time to time because once an insurer realises the policy has been fraudulently obtained it will be cancelled
  • If you suspect you are a ghost broking victim, check with the company whose name is on the insurance certificate and contact Crimestoppers on 0800 555111.

(20 November 2013)

*The awareness campaign was launched on Wednesday 20 November.  It is a joint initiative between the Association of British Insurers (ABI); the Insurance Fraud Bureau (IFB); the City of London Police Insurance Fraud Enforcement Department (IFED) and Crimestoppers.

**Danyal Buckharee and Giovanni Recchia were jailed by the Old Bailey respectively for three years and 12 months on 28 October.  The pair set up an elaborate ghost broking scheme, in which they duped more than 600 buyers into paying over £680,000 for worthless car insurance.  They used a recording of background office noise to make buyers think they were talking to a legitimate call centre. They were jailed last month

*** Policies bought through a ghost broker will appear on the MID database but if and when the scam is discovered, the policy will be cancelled.  If in any doubt, check ‘Ask MID’ (, putting in the registration number to cross check it with the Motor Insurance Database.  If a ‘vehicle not insured’ alert appears, do not drive the car and check with the company whose name is on the insurance certificate.  If in doubt, tell the police, providing as much information about who sold the policy as you can.


Emergency breakdown blog

Regular weather and breakdown updates

Emergency breakdown blog

Need AA Breakdown Cover?

We fix more cars by the roadside than anyone else. Get a quote »

Need AA Breakdown Cover?