Ghost Broking Insurance Fraud

Insurance Fraud Crash for Cash to Ghost Broking

Why it should concern you, what to look out for and where to report it.

ABI (Association of British Insurers) states in 2016 there were 125,000 fraudulent claims and that came at a cost to the British public of £1.3 billion and affected public services such as the justice courts and the NHS. That was the figure in 2016 but apparently, it's rising year on year, and that's why insurers now invest over £200 million each year on tackling the problem.

Fraud in the UK is estimated at costing over £190 billion up from £50 billion in 2013. To put that as an individual figure for each person living in the UK it's over £3000 per year each. With the private sector seeing the most significant rise in recent years.

It may seem unfair, but the money to pay these costs has to come from somewhere, and that somewhere is the consumer. From our taxes to the cost of insurance premiums, whether we like it or not, honest working individuals will end up footing the bill.

Crash for Cash Scams

There are various types of Crash for Cash scams, but the one you need to be most aware of is the induced crash. The induced crash scam is where the criminal pulls in front of your vehicle and then suddenly stops causing you to shunt them from behind. As often the driver that shunts into the back of another car is to blame the perpetrators usually go to great lengths, even disabling brake lights in some cases, to get you to hit them, and then they claim on your vehicle's insurance.

Crash for Cash Scams
Image courtesy of the IFB

While dashcams are helping to spot the criminals, there are things you can do to avoid these induced collisions too. Remember your highway code and always make sure you leave space between you and the vehicle in front. The rule of thumb is the two-second rule, pick a point on the road ahead, could be a sign or a lamp post and once the car in front of you reaches that point count one-one thousand, two-one thousand if you passed the mark after you said two-one thousand then you can stop in time should they suddenly brake.

If you see a car ahead driving erratically, back off and be ready to stop.

There are hotspots in the UK where this crime is taking place (see image below), but it can happen anywhere in the UK so always be vigilant. The most important thing after awareness is to report it, even if you manage to avoid a collision if the circumstances seem somewhat suspicious, report it.

UK Postcode hotspots for crash for cash scams
Image courtesy of the IFB

Ghost Broking

Ghost broking is a relatively new term and describes a scam whereby an online site offers very cheap insurance that turns out to be fake. Ghost broking while commonly associated with motoring insurance has started targeting other commercial insurance areas such as roofing contractors looking for competitive public liability insurance, they can set up online and provide what appears on the surface to be cheap insurance premiums for any type of insurance cover, but ends up just being some costly fake documents that to an untrained eye look genuine.

Two ways fraudsters do this are by buying a genuine insurance policy, and then they alter it and create lots of copies which they then sell to unsuspecting individuals or they create some fake documents from scratch that look very real and sell those.

If you are unfamiliar with an insurance broker or insurer and come across their website and the deal they are offering seems too good to be true, here's what you can do. Check they are registered with the FCA you can usually find this information in the footer or on their about us page of legitimate websites. Only use an insurer or established broker you know. BIBA is an excellent website to go to to find a legitimate broker too.

Do your research, never assume that because it's online, it's real. The consequences of buying motor insurance, for example, from a ghost broker are like having no insurance, such as...

  • The police could seize your vehicle.
  • You'll pay a fixed penalty of £300.
  • You will still have to buy the correct insurance and £150 to release your car from the pound.
  • You could end up liable for any costs due to damage or injury arising from an accident you cause while driving without insurance.

Where to Report Possible Insurance Fraud

The best place to report suspected insurance fraud is the IFB (Insurance Fraud Bureau) they have a cheatline set up which is powered by Crimestoppers the number to call is 0800 422 0421.


ABI - Association of British Insurers

IFB - Insurance Fraud Bureau

BIBA - British Insurance Brokers' Association

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