• 11, November 2023

  • Time to read: 6 mins

How To Spot an Insurance Scam.

Charlotte Simpson

Compliance & Quality Control Manager

With so many online scams, find out how you can evade being a victim of insurance fraud here.

Main Points:

  • Insurance fraud takes on many forms, in-person and online.
  • Fraudsters can be difficult to spot, but there are tell-tale signs to look out for.
  • Look out for signs such as ultra-cheap prices and unprofessional websites.
  • You can verify a broker or insurer is legitimate by checking the FCA register. 
  • Report any suspicious activity to Action Fraud online.
  • Alternatively, if you contact us, we can help you to report to Action Fraud.

How do I spot an insurance scam?

Social media app icons on a phone screen

Insurance scams will become easier to spot once you know the signs to look out for. Here are some tips to help you identify potential insurance scams next time you’re shopping around:

Beware of spam calls 

Be cautious if you receive unsolicited phone calls, emails, or messages offering insurance deals. 

Fraudulent brokers usually call from an untraceable number. Legitimate brokers never withhold their numbers and don’t cold-call or spam potential customers. The only time One Sure will contact you, for example, is if you consent to a callback for a quote.

Double-check their contact details 

Check the contact details provided by the insurer or broker. Scammers may use generic email addresses, phone numbers that don’t match the official contact details or unprofessional-looking websites.

Question unusually low premiums

It may be a scam if the premium offered seems significantly lower than what other insurers are quoting for similar coverage. Too-good-to-be-true deals often involve fraud.

Be cautious of any high-pressure tactics where scammers may pressure you to make quick decisions or pay upfront fees. Take your time to thoroughly review any insurance offer, and don’t feel rushed.

Confirm payment details 

Ensure that you are making payments to the official bank account of the insurer or broker and not to a personal account or a third party.

Trust your instincts

 Trust your gut feeling if something feels off or too good to be true. Walking away from a suspicious offer is better than becoming a fraud victim.

Check the legitimacy of the insurer or broker

Any valid insurer or broker will show customers that they’re authorised by the Financial Conduct Authority (FCA) number on their website. 

If you can’t find any disclaimer on their website, you can verify that an insurer or broker is authorised and regulated by the FCA via their online register of authorised firms.

What is insurance fraud?

A laptop on a white table with a cup of coffee and a pair of hands holding a phone

Insurance fraud comes in many forms and affects everyone from all walks of life. In fact, both a customer and an insurer can be victims of insurance fraud. 

In a nutshell, fraud in insurance is the act of deception to manipulate the insurance process to unlawfully obtain benefits or financial gain. 

It usually involves intentionally providing false information or engaging in dishonest activities to make fraudulent insurance claims or receive undeserved compensation. 

Fraud can occur online as well as on the phone or in person. In some circumstances, fraudulent behaviour can include scammers posing as insurance brokers and obtaining incorrect or counterfeit policies for an unsuspecting customer. This is often known as ‘ghost broking’.

Who commits insurance fraud?

Fraud may be committed at different points by applicants, policyholders, third-party claimants, or professionals who provide services to claimants.

Who is most likely to become a victim of fraud?

Anyone can become a victim of fraud, from top businesses and insurers to the average everyday person. 

Some groups of people are more vulnerable to fraud. People experiencing financial difficulties, young people, speakers of English as a second language, and older pensioners are more often targeted by scammers.  

Knowing the signs of a scam and how to spot one will help everyone become vigilant enough to avoid falling prey to fraudsters.

If you need help reporting insurance fraud, check out our guide: How To Report Insurance Fraud.

What type of insurance fraud is most common?

Motor and property insurance fraud are the most common types of insurance scams. Usually, this will involve disclosing false information to an insurer either for a cheaper premium or to get more from a claim. 

This can take the form of a homeowner exaggerating the value of their items when claiming for their home’s contents after an insurable event. In terms of motor insurance, scams can look like staged accidents, exaggerated or false claims for injuries, and the selling of fake or fraudulent policies. 

What is a ghost broker?

Close up of hands typing on a laptop

A ‘ghost broker’ is someone who poses as an insurance broker, usually online, and operates illegally by offering fraudulent or fake insurance policies. 

They manipulate customers into giving them money for fake policies. As a result, customers are not covered and cannot claim in the event of an insurable event. 

This is particularly problematic for drivers believing they’ve purchased car insurance or a motor trader policy from a ghost broker, as driving uninsured is a criminal offence. Many motorists, who unsuspectingly fall victim to ghost brokers, do not realise they’re uninsured until the police stop them.  

This type of scammer typically targets young or inexperienced drivers by promising them low-cost deals that seem too good to be true.

How do ghost brokers operate?

Ghost brokers often incorporate multiple elements to commit fraud, such as: 

  • Forged or counterfeit insurance documents
  • False or misrepresented details
  • Fake social media profiles
  • Websites without any accreditation
  • Instant messaging apps such as WhatsApp or Telegram 
  • Stealing the identity of another person to conduct the scam
  • Pretending to be another legitimate broker but using different contact details

To avoid falling victim to ghost brokers, we recommend going through the following checklist: 

  • Have they got an official website displaying their FCA accreditation?
  • Do they have a business address and professional phone number?
  • Are they on the FCA register?
  • Is this price significantly lower than other quotes?
  • Do they have a very vague and limited knowledge of insurance?
  • Are they focused on the sale and not the quality of your coverage?

How to use the Financial Conduct Authority’s register

A sure way to spot a ghost broker is to double-check their credentials. Genuine insurance brokers will be on the Financial Conduct Authority’s register. 

You can do this by visiting the FCA website and typing the company or insurer’s name in the search box. 

For example, we’ve searched for One Sure Insurance to show you how legitimate insurance professionals appear on the register. 

Simply type the name or the company reference number in the search box. We recommend using a reference number as it is more specific. This is at the bottom of any insurer or broker’s website. Here is an example with our website and reference:

If it is a business, click firm. If they are a person, click individuals. If you don’t have a postcode, don’t worry, this isn’t a huge necessity. 

Press search, and you’ll see the company appear if it is legitimate. Here is how we appear on the FCA register:

You will see clearly the reference number, name of the firm, location, and postcode. 

If you click on the business name, you’ll be able to see exactly the authorisation provided by the FCA. 

If you scroll further down, you’ll see more information regarding the company status, who they are, and associated businesses. 

Get support from One Sure Insurance

If you suspect you have encountered an insurance scam, report it to Action Fraud, the UK’s national fraud and cybercrime reporting centre. 

Alternatively, you can reach out to us. We understand that it can be daunting to report to Action Fraud, and we’re happy to create this resource for you. 

Call us on 01782880140 if you are concerned about insurance fraud or a scam, and we’ll get the ball rolling on a report. 

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