Liberty Insurance calls for wider fraud database to tackle ‘ghost brokers’

Liberty Insurance has called for a planned database to tackle fraudulent claims to be extended to capture a new and growing illegal phenomenon of operators offering fake coverage to motorists.

The US-owned insurance company, which owns the former Quinn Insurance business in Ireland, has warned that it has seen a "dramatic increase" in "fake brokers" in Ireland in the last 12 months, following on from a practice that was first identified in the UK a decade ago.

Fraudulent motor insurance is sold in two ways. First, genuine policies are bought from legitimate insurance companies using false customer information. The second method is where customers are given fake policy documents bearing the logo of insurance companies.

“These fraudsters typically advertise their services online or within local communities, claiming to be genuine brokers,” according to Liberty. “Foreign nationals are frequently targeted by ghost brokers.”

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Unsuspecting customers

The Government announced in January that it plans to set up a database for fraudulent insurance claims under efforts to tackle a surge in claims costs and motor coverage in recent years. Liberty is looking for the scope of the database, expected to be up and running at the end of the year, to be widened to cover fake brokers, who, it said, are charging unsuspecting customers up to €300 for their services.

Insurance Ireland, the industry representative group, said that it has no data on this issue but “proposes to research the extent of the problem” before deciding what action may need to be taken.

"Insurance Ireland advises customers to be vigilant and check the list of authorised brokers/intermediaries on the Central Bank of Ireland's website," said a spokesman for the organisation, adding that any suspected fraudulent activity should be reported to the gardaí or Insurance Ireland's confidential hotline.

A Central Bank spokesman said: “If a firm is not registered to provide that service, you should avoid using it.”

The Central Bank has a list of 300 unauthorised firms that have been subject to warnings from the institution, he said, adding that the Garda is notified when such a company is added to the list.

A Garda spokeswoman didn’t respond to a request for comment.