The insurance industry is thoroughly regulated, with numerous checks and balances. In the United Kingdom, however, scammers are able to pose as insurance brokersâ€”or â€œGhost Brokersâ€â€”offering significantly cheaper insurance than legitimate insurance firms.
The TelegraphÂ reports, â€œThe multi-million pound scam is operated by fraudsters who target drivers who are economising and looking for cheaperÂ motor insuranceÂ deals. These motorists are likely to be vulnerable pensioners, young drivers struggling with soaring premiums and those living within communities where English is a second language.â€
The scary part of this scam is that when unsuspecting victims purchase policies, they get certificates of insurance that are essentially worthless. In the event of an accident, they will not be covered.
In some cases, the ghosts will contact legitimate insurance brokers and broker deals for insurance policies that they then pay for using stolen credit cards. The victim gets a real certificate of insurance, but itâ€™s been paid for with stolen money. When the fraud is discovered, the policy is cancelled.
These rogue brokers engage in guerilla marketing campaigns involving windshield flyers, classified ads, and professional-looking websites.
Major insurance companies would fare better if they could identify ghost brokers and stop them in their tracks.Â One anti-fraud service thatâ€™s been garnering attention for delivering fast and effective results isÂ iovationâ€™sÂ ReputationManager 360. This SaaS-based fraud prevention solution incorporates device identification, device reputation, and real-time risk profiling. It is used by hundreds of online businesses to prevent fraud and abuse in real time by analyzing the computers, smartphones, and tablets being used to connect to websites. iovationâ€™s service can recognize devices that have been involved in scams and help insurance companies stop fraudsters upfront.