Fraudster sentenced for £17,000 car insurance policy scam on Instagram

Ghost brokers pose as middlemen for well-known insurance companies, claiming that they can offer legitimate car insurance at a significantly cheaper price. They will forge insurance documents, falsify customer details to bring the cost of the premium down or take out a genuine policy and cancel it soon after.

Crucially, victims often only realise that they don’t have genuine cover when they try to make a claim on insurance or are stopped by the police.

On 6 June at Inner London Crown Court, Usmani pleaded guilty to fraud by false representation, carrying on a regulated activity when not an authorised person and money laundering. At the same court on 24 July, he was sentenced to 24 months’ imprisonment, suspended for 24 months. Usmani must also complete a 15-day rehabilitation activity requirement and pay £1,000 in costs.

Detective Sergeant Phil Corcoran, from the City of London Police’s Insurance Fraud Enforcement Department, commented: “Usmani enticed his victims with the offer of cheap car insurance, but left them with policies that were worth less than the paper they were printed on. Ghost brokers like Usmani prioritise their own financial gain above all else. We know that the rising cost of insurance premiums means people are always looking for a cheap deal, but it’s vital to check that insurance policies are being bought from legitimate sources.”

Corcoran added: “Buying a policy from a ghost broker could end up costing the individual a fine, points on their licence and their car being seized, not to mention having to cover the cost of a new and valid policy.”

Background to the case

The case was referred to the City of London Police’s Insurance Fraud Enforcement Department in January 2021 by LV= General Insurance (LV=).

The fraud team at LV= identified a motor insurance policy that it suspected was fraudulent. The policyholder told LV= that they had bought insurance from a broker who used an Instagram account called @cheap_car_insurance_quotes. According to the account, customers could “save up to 60% on every quote”.

Further enquiries showed that the account was linked to Usmani and that he had taken out another 13 fraudulent motor insurance policies. In each case, customers paid Usmani anything up to £250 and he manipulated their details to obtain cheaper quotes.

Officers from the Insurance Fraud Enforcement Department arrested Usmani on 14 April 2021. An examination of a mobile phone seized during a search of his home address confirmed that he operated the @cheap_car_insurance_quotes account.

Insurance Fraud Enforcement Department analysis of Usmani’s bank account revealed that it had received several payments worth a total of £17,618 between February 2020 and January 2021. Payments worth a total of £2,888 were linked to the 14 policies at LV=, while another £4,319 was confirmed to be related to further ghost broking activity. Nineteen additional payments were suspected to be related to ghost broking.

The @cheap_car_insurance_quotes Instagram account has since been taken down.

Driving up costs

Ben Fletcher, director of financial crime at LV= General Insurance and Allianz personal lines business, commented: “This is a fantastic result. We’ve worked collaboratively to achieve a great outcome against a ghost broker who was deliberately lying, making money and putting innocent motorists at risk.”

Fletcher continued: “Cases such as this one only serve to drive up costs for our genuine customers, which is why we’re committed to uncovering insurance fraud and achieving the right outcome for all. Unfortunately, if it looks too good to be true then it probably is. It’s worth looking out for signs such as insurance documents, which may not be genuine.”

Nicola Smith, intelligence and investigations manager at the Insurance Fraud Bureau, observed: “Usmani took advantage of those who struggled to afford car insurance just to line his own pockets. Not only did this cost victims their hard-earned cash, but they also risked serious criminal consequences for driving without valid insurance.”

Smith concluded: “Ghost broking is widespread across social media and more people must know how to spot such activity, which is why we’re campaigning n partnership with the Insurance Fraud Enforcement Department and the insurance industry to raise awareness of this important issue.”

According to the latest figures issued by the Insurance Fraud Bureau, the number of individuals who fell victim to ghost brokers on social media increased by 6% last year. While one-in-five 18-24 year olds now use social media to search for car insurance, a recent YouGov survey revealed that only one-in-ten people are familiar with ghost broking.