The mutual insurer is supporting the Insurance Fraud Bureau’s campaign to raise awareness of ghost broking, which can leave vulnerable people with inadequate or non-existent cover while ghost brokers line their pockets.

While ghost brokers frequently sell non-existent car insurance policies to unsuspecting people online, another common type of ghost broking fraud is to buy fraudulent policies on behalf of vulnerable people who may struggle to access insurance.

Charlotte Brown, underwriting counter fraud manager at NFU Mutual, warns that this is illegal and could leave the drivers without proper insurance. She said: “We regularly intercept attempted fraud where ghost brokers buy policies for people using false or misrepresented details, often with many policies being traced back to one or two individuals.

“The named drivers on these policies are frequently vulnerable people, those with prior convictions or living in neighbourhoods which make it difficult to access insurance, who can be left without insurance when the fraud is uncovered.

“Meanwhile, ghost brokers are preying on their vulnerability to cash in – money which is then often used to fund further criminal activity. We warn these pernicious ghost brokers that we know their tactics and will not hesitate to refer them to the police.

“For those who are struggling to access insurance and may be approached by those offering a cheap deal, we advise to shop around and speak directly to insurers – if a so-called broker offers a deal which seems too good to be true, it probably is.”

Case study: Anatomy of a Ghost Broker Network

NFU Mutual counter fraud investigators recently uncovered and broke up a £120,000 ghost broking network where one person attempted to purchase car insurance cover for 47 policies.

The individual called NFU Mutual Agency offices across the country and, each time claimed that a different car was registered to a false address nearby. As the address provided was false, the individual requested each time that policy documents were sent over email.

The real owners of each vehicle were listed as named drivers on the policies, but almost all lived in higher-risk postcodes elsewhere and the majority had a County Court Judgment (CCJ) or conviction against their name.

The policyholder occupations were usually listed as relating to financial services, to give them the appearance of being an attractive customer, and the name and date of birth of the policyholder was taken from Companies House.

NFU Mutual counter fraud officers were aware of each attempted fraud through established fraud detection systems, then began an investigation into the call recordings which eventually uncovered a vast network of 47 policies linked to the same individual. This investigation uncovered the named drivers’ real addresses, most of which were in London.

The mutual insurer voided all the quotes and ultimately saved NFU Mutual members an estimated £120,000 in policy and claims savings, referring the ghost broker at the centre of the network to the police.

NFU Mutual continues to work with partners across the industry and with the police to raise awareness and improve the joint response to the multibillion-pound insurance fraud industry.

David Phillips, chair at the General Insurance Fraud Committee (GIFC) and Claims Validations Technical Manager at NFU Mutual, added: “We know that fraud increases in times of hardship and that impenitent criminals will be looking to prey upon innocent cash-strapped motorists.

“Insurance fraud is a socially corrosive crime and those that create illegal and bogus policies leave young people, often some of the most vulnerable of society, without cover and without a safety net against the far-reaching consequences of driving without a legal policy in place.

“The General Insurance Fraud Committee (GIFC) brings together the UK’s largest group of insurers to fight insurance fraud and protect our customers from fraud, so we are proud to be working with IFED, IFB and ABI to raise awareness of the pernicious and damaging effects of ghost broking fraud.”