Q&A: The answers to the questions you might be asking about ghost brokers?

A Garda Superintendent today warned that ghost insurance brokers are preying on the naivety and inexperience of new Irish citizens to take out fraudulent insurance policies. Here's the answers to the questions you might be asking about ghost brokers.

What is a ghost broker?

Ghost brokers are professional fraudsters selling forged or invalid discounted insurance policies to unsuspecting consumers.

They usually advertise their services online or within local communities, typically claiming to be able to secure cheap motor insurance policies for clients.

How do they operate?

Ghost brokers usually operate in one of two ways:

They forge policy documents and sell them to the member of the public, while pretending to work for, or act on behalf of, a legitimate insurance company.

They purchase a real policy from a legitimate insurance company, but they change important information about you, such as your age, driving experience, no claims history, etc. in order to bring the price of the policy down. The ghost broker then sells the policy to you and charges you a fee for doing so.

Using a ghost broker

Ghost brokers trick unsuspecting consumers into believing that they are buying a valid insurance policy at a cheap price by using one of the two methods above.

Who is at risk?

Anybody can be duped by the practice but Aviva says the operators have been specifically targeting non-nationals. They operate on social media or by placing adverts in local newspapers and look to take advantage of people who are unfamiliar with the insurance system or who have limited English language skills.

What are the consequences?

Your insurance policy may be invalid, potentially leaving you uninsured and liable to pay for any damage caused.

Advice for consumers

Ghost brokers are unauthorised to sell insurance to the public and are not supervised by the Central Bank of Ireland. The Central Bank encourages anyone intending to purchase insurance to check their online registers to ensure that the firm is authorised to provide the service it is offering.

If a firm is not authorised to provide that service, you should not use it.

How big an issue is it?

Aviva has revealed that it is dealing with up to 1,500 policies that have been taken out fraudulently.

The insurer believes that up to 10,000 policies nationally have been taken out by ghost brokers.

How long has it been going on for?

Aviva believes that some ghost brokers have been operating for three to four years.

What is being done about it?

Gardaí believe that one or two "major players" are behind the crime, organising a network of smaller operators to run it at local levels.

The unit investigating the issue is working with insurance companies and is looking to use information provided by the companies to break up the operation and identify those who have been duped and those behind the practice.