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Instagram Car Insurance?

My mate got stung with an £80 fine the other day for trespassing into London's Ultra Low Emission Zone (ULEZ) in his 20 year old Toyota Hilux Pick Up truck. This is the same model as they dropped off a cliff in an episode of Top Gear and it still started first time, so understandably, he is reluctant to get rid of it. Unfortunately, the diesel engine lays down more smoke than the Graf Spee trying to flee from the Royal Navy and its as far from being ULEZ compliant as is possible to imagine. He has researched buying a newer truck to replace it, but the cost is prohibitive. The cost of motoring looms large in his house as his 18 year old daughter Sophie has just past her test and her doting dad bought her a nice little runaround to cut her teeth in navigating the roads of North London.


Whilst happy to fund the cost of the car, he insisted that Sophie pay for her own insurance to assist in her understanding of the true cost of motoring. The car cost £3,000 and is a small 3-door with a 1.0 litre engine and only one previous owner. He drove it away from the seller's house on his own insurance and parked it on the drive whilst she obtained a few quotes with her as the main driver and him to be a named driver on the policy, which, in theory, should reduce the overall cost.


Sophie checked the major price comparison sites and was horrified to discover that 12 months insurance would cost her more than the car had cost her dad. She spoke to various people on the phone with a view to agreeing to a huge voluntary excess in return for a significantly lower premium, however, try as she might, she could not get the figure to below £3,000. Feeling dejected she rang Scarlett, a friend who had passed her test the week before but who had to buy her own car. Her friend suggested Sophie have a look on Instagram as there were insurance brokers who promised at identical cover as the 'big boys', but with at least a 50% discount on their best quote. Scarlett had been really impressed by the value they offered and the speed of service; her insurance certificates were emailed to her within an hour of her paying the annual premium.


Sophie had an Instagram account and could hardly wait to find out if such bargains really existed. Sure enough, she found plenty of insurance brokers making similar claims of huge discounts based on the fact that they had very few overheads as it was purely an online business, and the fact that they specialised in dealing with younger customers (Instagram users) and this enabled them to pass on their savings to their customers.


Clearly the attraction of paying a great deal less for insurance was huge. She wondered how the traditional big companies could still exist with such strong competition from these newcomers to the market. Instead of paying £3150 for 12 months insurance she willingly paid £1450 on her debit card although this virtually wiped out all of her savings. The broker explained that they could not offer monthly instalments as this incurred a banking cost to them which they would have to include within their premiums - she accepted this without reservation. The insurance policy itself together with 5 pages of Terms & Conditions arrived in her Inbox after 45 minutes and she could hardly wait to go on her first legal and unaccompanied drive.


Sophie rang Scarlett and agreed to meet at a pizza place with a few other friends on a local retail park to have lunch and compare notes and cars. The group of friends all arrived in their small, used and underpowered cars, and the chat over lunch invariably centred on how much owning a car cost, but all agreed it was an absolute necessity. Sophie and Scarlett basked in being the envy of their peers as far as their insurance costs were concerned and smugly explained that they all had to engage with the 'gig economy' if they were going to survive. Lunch finished, Sophie decided to drive home and wash her pride and joy.


Turning right of the retail park and heading towards home, she heard a siren, looked in her rear view mirror and saw a large Police car behind her. Being a responsible motorist she pulled in to let them pass - only to find that the driver pulled in behind her. He didn't want to overtake her, he was stopping her. She quickly mentally rehearsed her journey from the pizza place; all the lights had been green, she had not been speeding, and the car had 6 months of MOT left on it. Her dad had checked the lights and tyre pressures the day before and assured her that it was good-to-go.


She got out the car and met the Police Officer between their two vehicles'

Officer; Do you know why you have been stopped?

Sophie; I'm sorry, I haven't a a clue (clearly a fan of Radio 4)

Officer; Your car just got 'pinged' for no insurance by our Automatic Number Plate Recognition system

Sophie; Oh thats just a mistake, I'm fully insured, I can show you the email on my phone


Sophie quickly found the email and opened the attached policy of insurance. The cop made a quick call via his radio to the Motor Insurance Bureau and explained that her policy was a work of pure fiction. She was not insured, the company she though she was insured with did not exist and her money was long gone. The officer accepted her explanation, however, her car had to be seized and taken to a Police car pound. If she wanted it back, she would have to pay all costs and prove she had (genuine) insurance to take it away. In addition, she would be prosecuted for driving without insurance, which would add 6 points to her brand new full licence - further increasing the cost of her next policy. Sophie was still in floods of tears when her dad arrived to give her a lift home, and just as her car was being lifted onto a breakdown truck.


Sophie rang Scarlett and explained what had happened and strongly suggested that she finds out if she had also been conned. Within an hour both were crying on each others shoulders at their combined loss of over £3,000. Without divulging the source of my 'expert knowledge' I explained to Sophie and her dad that if it looks too good to be true - it's probably is a scam.


A variation on the same scam is for the dodgy broker to genuinely insure the customer with a real insurance company, however, they make fundamental differences to obtain the quote. A single 18 year old student from North London is miraculously transformed into a 55 year old spinster from Northumberland - and magically, the quote is much much lower. The problem is that if they are ever involved in any sort of claim, the insurers will refuse to pay out as they (or rather the broker) has made a material misrepresentation to obtain the policy.


The 'Gig Economy' is everywhere, and there are real benefits to the way in which it has revolutionised our lives. Getting a taxi or a takeaway has never been simpler, however, for certain things there are huge and serious risks in handing over large sums of money to someone who only really exists on sites such as Instagram. If you spend 10 minutes on these sites you end up believing that everyone lives in a show home, has a perfect body and the cutest of kittens. The only snag with that is, just like the insurance offered by these 'ghost brokers' offer - it's not real!


Please wake up!








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