‘Ghost brokers’ selling thousands of bogus insurance policies

Thousands of motorists across Ireland have invalid uninsured policies after falling victim to "ghost broker" insurance scams , Aviva Insurance has said.

Robert Smyth, investigations and fraud manager at Aviva, said the company set up a team three years ago to detect fraud.

He said this team had identified 10 illegal ghost broker operators linked to between 1,000 and 1,500 policies.

Ghost brokers pose as legitimate providers selling insurance, mainly targeting foreign nationals or young drivers.

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The bogus operators offer prices at significant discounts to the market rates among registered providers.

The scam operates with the bogus broker buying insurance policies from a registered insurance company using the customer’s information, but forging a false no claims bonus, and paying for the policy using a stolen credit card.

The scam broker will then charge the customer around half the price of the policy, which will not be valid.

In other cases ghost brokers will sell fake or forged insurance certificates and discs to drivers.

An insurance company will cancel the policy if it identifies the fraud, leaving the motorist driving without cover.

Aviva said it estimated up to 10,000 policies nationally have been taken out by ghost brokers, in practice leaving these motorists without cover.

In a statement, Mr Smyth said ghost brokers had operated undetected in Ireland for several years, with evidence suggesting some of the fraudulent operators have been in the market back as far as 2010.

“Representatives from An Garda Síochána’s special investigation unit attended an Aviva fraud conference earlier this year where they advised us that they estimate that approximately 9,000 motor policies have been obtained via ghost brokers,” he said.

Garda Superintendent Tom Murphy, who is leading an investigation into the scam schemes, said many motorists taking out policies from ghost brokers were “pure innocent victims.”

“New Irish people coming in who fall into a trap because they are targeted in their own language. These ghost brokers are preying on the naivety and inexperience of these people to fully understand the Irish system, they prey on victims,” he told RTÉ radio’s Morning Ireland.

One victim of the scam, Nataliya Nastechyk paid more than €2,000 for her policy as well as several hundred euro as a brokerage fee.

She told Morning Ireland that she paid the supposed brokerage fee directly into a bank account.

The fee she was charged represented a saving of more than 50 per cent of what a legitimate company had quoted. However, the illegal broker supplied misleading information to the insurance company concerned and they detected the fraud.

Ms Nastechyk, who is from Ukraine, explained how the man who acted as a broker spoke Russian, which was useful as she had poor English at the time and did not understand the insurance system in Ireland.

“I told him I am looking for a good one (policy) as I was working here and living with my children and I wanted everything to be right,” she said.

After she paid the brokerage fee directly into his bank account, she received her insurance certificate and disc in the post from her insurance company, so she thought it was all above board.