Worldwide, ghost brokers have learned how to deprive innocent victims of their money by using falsified policies. And one reason it’s such a pervasive scam now, is the lack of awareness surrounding its prevalence in the industry. In the realm of honest insurance, this is something we want to put an end to, and fast. And thanks to our AI capabilities, FRISS is here to help.
Ghost Broking 101
Contrary to what they would tell you, ghost brokers are not legitimate brokers. In fact, they usually just pose as such to con unsuspecting customers into purchasing falsified premiums. How this works is, the ghost brokers will typically tell customers that they’re willing to handle the monotonous process of finding the lowest rate for them. And many times, the price does seem too good to be true afterwards, but without much of a reference point for insurance fees, vulnerable people fall victim to this quite often.
In reality, the ghost broker either creates a legitimate policy and cancels it once they show “proof” to the customer; or the broker will use a single policy for multiple people. This leads the victims to believe that everything is taken care of because they’d seen official-looking documents, too. And the scam only unravels once the customer reaches the claims process. At this point, either the carrier will be left with more exposure than they bargained for, or the victim won’t have a valid insurance policy when they need it most.
Who Is at Risk?
Anyone with a high premium is a potential victim, but particularly young drivers. Brokers will target them using social media with ads promising low premiums and full coverage. Often, these promises seem too good to be true. Yet, for young adults who are not yet financially stable, this may seem like the best choice. Brokers will also target immigrant families who are unfamiliar with their new country’s culture and national languages. And although pervasive, these are just two examples of ghost broking worldwide. There are a multitude of other tactics that are used to achieve the same results. If we want to take further steps towards honest insurance, this is one fraud scheme that needs to be tackled immediately.
Ghost broking is an issue that has existed for quite some time, within different markets, too. And with the recent move to digital and contact-less insurance, ghost brokers are taking advantage of the transition. As most companies have started to utilize online marketing, ghost brokers are doing the same. They’ve begun recruiting victims through new platforms and are signing people up as fast as possible. They mimic insurance companies who are doing the same, to improve customer satisfaction with quicker underwriting. Tons of unsuspecting customers are finding themselves caught in this scam, in part because many are reeling from the pandemic’s financial impact.
So, what can we do about it? We know that ghost brokers create policies for multiple people, exploiting the lack of automated mechanisms that would examine if policyholders’ emails and phone numbers overlap. Because of this, ghost brokers can use identical contact information for dozens of people. Unfortunately, in a large company, it’s unlikely that manually checking customers’ information is a plausible solution because of its tedious nature. So, that’s why we designed our products to do it for you. Fraud solutions typically focus on claims rather than underwriting, so to address this growing issue, we want to shed light on where ghost brokers’ leverage is coming from.
At FRISS, we’re constantly upgrading our technology to get ahead of fraudsters. We offer a full suite of AI solutions to address end-to-end fraud, and one of them, in particular, tackles this situation perfectly. Our product known as the Network Viewer tracks many types of similarities and will automatically link all of the data from your book of business, to form a web of connected information. It will show correlations in claims filed, witnesses present, locations, items involved and more. But even better for ghost broking, it will track contact information too. In the past, if a ghost broker had created dozens of policies with the same contact information, they could most likely get away with it, for a period of time at least. However, with FRISS, that would no longer be an option because it wouldn’t go undetected in the same ways as before.
You don’t want your progress stagnated by ghost broking, and neither do we. We want to put an end to it as early as possible so customers have access to honest policies, and you can focus on the things that matter most. We know this growing scam needs to be stopped ASAP, and our goal at FRISS is to make sure that it doesn’t spread any more than it already has.
The reason we’re able to tackle such expanding topics like ghost broking, is because of our technological capabilities. For example, FRISS’ underwriting solution focuses on things like consistent and unbiased screening, our ability to enable quality portfolio growth for our customers, and how we facilitate straight-through-processing with digitization of underwriting and renewal processes. But not only that, we want to improve your customer experience and minimize operational costs while we’re at it. Our main goal is to help you detect and prevent fraudulent claims, saving you precious time and money.
What Can You Do to Protect Yourself and the People Around You?
At FRISS, we want to catch ghost brokers in the act, but we recognize that no one wants to be a victim of this scam either. So, to get a leg up on fraudsters, here are some steps you can take to prevent it in the first place:
1) Use trusted sites. Don’t purchase your policy from a website that you’re unfamiliar with. And when in doubt, always look for reviews online before taking further steps.
2) Don’t trust a broker unless you see their license. Brokers are licensed professionals, so the person on the other side of the table must have proof of that to be in a legitimate position.
3) When in doubt, ask your insurance carrier. Many of the bigger companies have customer support centers and do offer their services in multiple languages. So, don’t hesitate to ask for help!
Unfortunately, sometimes it may just be too late to recover your money. But there is some good news! Local authorities have processes in place to stop this from happening any further. If you realize that you’ve been affected by ghost broking, you can contact the Financial Services Regulatory Authority of Ontario (FSRA) and the Insurance Fraud Bureau (IFB) in the UK for assistance and advice on what to do next.
To Learn More:
If you’re interested in learning more about ghost broking and how we plan to stop it, download our e-book to find out more about how to know your customer or request a demo today! Let’s come together to disrupt these scammers once and for all and support the customers who need it most. While you’re there, check out our video too, and find out why we believe insurance is a beautiful thing!