'Ghost brokers' may have sold up to 9,000 fraudulent motor policies
Up to 9,000 motor insurance policies are under investigation for being fraudulent as part of a probe into criminals selling forged or invalid discounted cover.
Gardaí working with the Special Investigations Unit (SIU) have revealed how the insurance industry would suffer a loss of more than €23m if the policies were found to be fake, resulting in another hike in drivers' premiums.
The investigation is probing the activities of so-called "ghost brokers". These are professional fraudsters who sell forged or invalid discounted insurance policies to unsuspecting consumers.
They claim to have a commercial relationship with insurance companies and falsely assert they can procure insurance at a discount.
Garda George Thurlow, who works with the SIU, said they had seized €600,000 in assets in the past 14 months from seven fraudsters.
"When our unit comes across a ghost broker, we go after their funds and their assets," he said. "The thing that criminals care about is their wealth and the money they've made. Most of them don't even care about going to prison - it's their assets.
"Six policies found by Aviva to be fraudulent resulted in a loss of €15,350.31, so if we replicated that across the 9,000 we're currently looking into, that's an estimated loss of €23,025,465.
"It has a knock-on effect for everyone that pays insurance in this jurisdiction, as it means if a person who was supposed to pay €4,000 for their policy only pays €600, that means your premium has to go up to get the balance and keep the reserve for insurance companies," he added.
Garda Thurlow, speaking at Aviva Insurance's annual fraud conference, said 'ghost brokers' had been operating in Ireland since 2007.
"There are a number of people before the courts at the moment, but it's definitely an issue that hasn't been tackled properly," he said.
"We [the SIU] have been doing our best, but to take a football analogy, you have the premiership teams in the UK and we're probably someone like a League One team.
"We're driving our own bus, we've holes in our shoes and we're washing our own jerseys. We need a few more players. We're trying to get there, but there are more ghost brokers out there and we can only work with the resources we have."
Some of these fraudsters are also setting up policies solely for the purpose of staging a fake accident in a bid to bring personal injury claims.
Aviva recently investigated six policies after a number of people brought personal injury claims. All of the accidents occurred within 14 days of the policies being taken out, happened in isolated areas and no gardaí or emergency services were called. They were found to be fraudulent after a costly investigation.