Watch out for 'ghost brokers' selling fake auto insurance
April 15, 2019

Watch out for ‘ghost brokers’ selling fake auto insurance

A Hamilton, Ont., mother says she lost thousands of dollars and the right to drive her car after a “ghost broker” sold her bogus auto insurance.

Inass Mohmed was in a collision last year and phoned her insurance company to make a claim. That’s when she found out her insurance slip was fake. Not only did Mohmed lose her car but police ticketed her for driving without insurance, and fined her $5,000.

Believing Mohmed had been the victim of fraud, a team from Aviva and Desjardins decided to help. A private investigator tracked down the man whom Mohamed says sold her fake insurance, and recorded him exchanging documents for cash.

What is a “Ghost Broker”?

“Ghost brokers” are becoming more prevalent in the UK, U.S. and emerging in Canada. They are people posing as insurance agents to sell cheap, fraudulent policies to consumers who think they’re obtaining legitimate coverage from a licensed insurer.

Victims may not discover they’ve been involved in a scam until they file a claim. They are then told that their policy is not in force with the company.

Doing business with these false insurance agents could put you, your family and your finances at risk.

Here are some helpful tips on how to spot a fraudulent insurance agent.

  • Avoid agents who advertise cheap insurance on social media sites or messaging apps.
  • Watch out for agents who communicate solely via social media or email. Scammers may not list a phone number or may be difficult to reach via phone.
  • Be wary of agents who ask for cash-only payments in person or via cash-transfer mobile apps.
  • Never use an agent who promises to secure an insurance policy without providing any direct communication or documents from the insurance carrier.

If you’re in doubt, you should:

  • Do your research, check to see if the agent is licensed and also look at online reviews.
  • Don’t sign any paperwork until you’ve checked that the agent is licensed.
  • Don’t make any payments until you’ve confirmed the agent’s license.

Have a question? Make sure to contact us right away. We’re always here to help!

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