Thousands of fake car insurance policies have been sold by fraudsters operating in this country - forcing many unsuspecting drivers to pay on the double for their car insurance.
Aviva has identified between 300 and 400 of its policies which have been sold by the fraudsters - who are known as ghost brokers. As ghost brokers are also selling policies issued by some of the other major insurers, Aviva believes that thousands of fake policies have been sold across the Irish market. "We have identified three or four separate ghost brokers selling Aviva policies," said Robert Smyth, fraud manager with Aviva. "Some of the brokers are cutting and pasting the Aviva logo onto their Facebook page. The brokers weren't just targeting Aviva - they're targeting other insurers too. So you're probably into thousands of policies over a number of years. It's a significant problem."
Ghost brokers claim to be insurance brokers who are authorised to sell car insurance. These brokers lure in drivers with promises of discounts of 50pc or more off car insurance. However these individuals are not authorised to sell insurance. The policies they sell are worthless, and any money handed over to them will be lost.
Some ghost brokers advertise on social media websites such as Facebook. Such brokers typically buy car insurance on behalf of a driver after promising to secure the cover for the driver for half the price (or even less). The broker then uses a fake or cloned credit card to buy the insurance. The driver, who is unaware of this fraud, then pays the ghost broker the portion of the premium which he agreed to pay (typically, half the original premium quoted by an insurer). This fee is usually paid through a Western Union money transfer.
However, the cloned or fake credit card is usually detected by an insurer within time. The policy bought through the ghost broker is then cancelled by the insurer and money fraudulently taken from the credit card account is returned to the credit card company or owner. At this stage, the driver needs to rearrange his car insurance (through his insurer) and pay for a genuine policy. Any attempt to secure a refund from the ghost broker for the fake policy will be futile. So the money paid by the driver to the ghost broker is lost.
In other situations, the broker gets the price of a driver's policy down by changing important information about the driver - such as their age and driving experience. As the policy is built on false information, it is invalid and the driver would not be covered in the event of a claim.
"People are coming across these brokers on online forums, websites, magazines, and in Facebook ads," said Smyth. "One customer of ours made contact with a ghost broker and gave him the quote she had obtained from Aviva - as well as all of her personal data. The ghost broker went online and used this information to buy her insurance - without asking her permission to do so. He then returned to her and demanded the money."
Those most in danger of falling prey to ghost brokers are inexperienced drivers - who are attracted by the promise of cheaper cover, and foreign nationals - who are unfamiliar with how motor insurance works. Ghost brokers often suggest meeting their customers in a car park or coffee shop to sell the insurance - or to hand over NCB or other insurance documents. "Insurers don't operate in that way," said Smyth.
Some ghost brokers sell fake no claims bonus (NCB) certs, which drivers then use to get cheaper insurance. A fake NCB cert states that a driver has a higher claims-free driving history than is the case - which in turn allows the driver to get a higher no claims discount. "People can buy these fake NCBs on the black market for €300 or €400," said Smyth.
Once these fake NCB certs get into the system, they can become 'legitimised' a year later when an insurer comes to update the cert - if the insurer has not detected that the cert is a fake. So the driver continues to receive a no claims discount which he is not legally entitled to and the cert continues to be updated and used over the years - unless an insurer spots the discrepancy.
"We have identified people who started off with fake no claims bonuses three to four years ago," said Smyth. "In such cases, we contact the customer and ask them to explain - and if they are aware of what happened."
The driver is often fully aware that the NCB he is buying is fake, and his intention is use it to deceive an insurance company. It is a criminal offence to buy or sell a fake NCB cert and you could be fined or imprisoned for buying one - if you had criminal intent when you did so. You could also face other criminal charges for presenting the fake cert to an insurer or broker for the purpose of buying insurance.
"Insurance is there for when you have an accident or problem - so if you do have a problem or accident after getting insurance through a ghost broker, you won't be covered as the policy won't be valid," said Smyth. Furthermore, as your car is uninsured, it could be seized by the Gardai. To get your car released, you will have to buy legitimate insurance and pay for the costs of impounding your car.
You could also be convicted of an offence under the Road Traffic Acts for driving without valid insurance. Such a conviction could make it difficult and more expensive to get car insurance in the future.
Don't be afraid to use an insurance broker when buying car insurance - but always check that the broker is regulated by the Central Bank and authorised to sell insurance. You can do this by checking the online registers of the Central Bank (registers.centralbank.ie).
No matter how expensive your car insurance, don't engage with ghost brokers as they will be manipulative and intimidating - and ultimately, you will lose money. If you are desperate to bring down the cost of your insurance, shop around banks, insurers and legitimate brokers as you may be able to get a cheaper quote in that way. Going for a policy with a higher excess (the first part of a claim which you pay yourself) or changing your level of cover (opting for third-party, fire and theft instead of comprehensive for example) may also help reduce the cost of your insurance.
Be particularly wary of any pop-up ads on Facebook where a broker offers a major discount off your car insurance. This is a telltale sign of a ghost broker. "In the car insurance market, insurers offer discounts through the no claims bonus system," said Smyth. "There won't be an additional 50pc discount for no reason." In these ads, you will usually be told that you don't have to pay upfront for the insurance and you are invited to text the broker "a private message" for more information.
When you buy car insurance, check all the paperwork for accuracy. If any details are incorrect, contact your insurer.
Check your credit and bank statements regularly. If your statement shows that an insurer has charged you for car insurance even though you're not a customer of the insurer, it is likely that your credit or debit card has been cloned and has been used by a ghost broker to buy fake car insurance. "Cloned credit cards are being sold on the black market - and they're also selling them online," said Smyth. Contact your bank or credit card company immediately should you notice such a transaction - as well as the insurer and the Gardai.
You could pay about a third — or hundreds of euro — more for your car insurance by buying it direct from an insurer rather than from a broker, a survey by The Sunday Independent has found. You could also save hundreds by buying car insurance from your bank rather than your insurer — though this will depend on the exact bank.
The Sunday Independent surveyed the cost of comprehensive car insurance for a 38-year-old male dentist from Newbridge, Co Kildare. The dentist drives a 1.6-litre 2008 Nissan Qashqai (two-wheel drive, petrol model) which is valued at about €15,000. He has had his full licence for 10 years, he has not made any claims in more than 10 years, and he has no penalty points. His car is alarmed and kept in a garage at night, and he drives about 9,000km a year. He is looking for cover for himself only — and he uses his car for social and domestic reasons. He wants a policy with an excess (the first part of a claim you must pay yourself) of between €250 and €300.
We included some of the main insurers (Allianz, Aviva, FBD and Liberty) in our survey, as well as the broker Chill Insurance, Post Insurance (a subsidiary of An Post), and the banks which sell car insurance (AIB, Bank of Ireland, KBC and Ulster Bank). We also included Galway-based Bump Insurance, which sells through brokers.
The cheapest quotes were provided by FBD (€534.81), Chill Insurance (€588.62) and Bump Insurance (€607.71). Post Insurance quoted €643.46 while Bank of Ireland quoted €622.93 for its ‘Popular’ car insurance plan, and €683.06 for its ‘Prestige’ plan. (The excess on ‘Popular’ is €500, while the excess on ‘Prestige’ is €250.) The Bank of Ireland quotes included a 20pc discount which is available to the bank’s customers.
The most expensive quote came from Ulster Bank. Ulster, whose insurance is underwritten by Aviva, quoted €818.44 for the cover. At €804, Liberty was the second most expensive, followed by Aviva, which charged €800 as long as the insurance was paid upfront. (If the driver were to pay his premium in monthly instalments, the cover cost €979.65 with Aviva). AIB quoted €742.90 while Allianz quoted €741.18. KBC could not provide a quote as its insurance is underwritten by Zurich and Zurich declined to participate in our survey.
Although it was an insurer (FBD) which came out cheapest in our survey, most of the insurers worked out more expensive. Banks may be worth approaching for insurance as they may offer discounts in addition to the normal no-claims bonus discounts. Bank of Ireland for example offers a 20pc customer discount, and an additional 5pc discount if you have home insurance with the bank too. Ulster Bank offers a customer discount of up to 10pc — depending on the type of account you have. AIB offers a 15pc discount if you have home insurance with it, and it also offers discounts to customers who own electric or hybrid cars, customers aged between 17 and 24 who use a safe driving app, and aged 50 or more who drive less than 8,000km a year. Post Insurance offers a 10pc discount if you have home insurance with it. Many insurers (including FBD) offer loyalty and safe-driving discounts too so be sure you’re getting all the discounts you’re entitled to.