Police today smashed a ring of suspected fraudsters behind a multi-million-pound “ghost broker” car insurance scam.
Detectives raided 28 addresses, including nine in London, in an operation targeting conmen selling fake policies to mainly young motorists.
The criminals set up bogus websites and use social networks such as Facebook and Gumtree to reach victims.
Fake policies have been sold on university campuses and there is evidence that the conmen have been using price comparison websites.
Insurance companies estimate that as many as 20,000 motorists could be driving around without insurance cover because of the scam.
Today’s raids followed a three-month intelligence operation by City of London police’s insurance fraud enforcement department. Twenty seven people were arrested by mid-morning.
A 22-year-old man held at a three-bedroom flat in an Isle of Dogs tower block was suspected of operating a fake insurance business from the property. After a family member opened the door at 6.45am police seized two laptops and the suspect was taken for questioning. Detective Chief Inspector Dave Wood, the head of IFED, said: “The scale of this fraud is impossible to verify but we believe it is one of the main elements of insurance fraud.
“These people are usually one-man bands operating on laptops and running scams that are hoodwinking young people who have just started driving. The consequences for innocent motorists can be dire.”
In a recent case one conman fleeced 600 victims out of more than £550,000 operating on his own from a flat in south London. When police arrested him they found an iPod with background sounds of a busy office.
Mr Wood said young drivers faced losing thousands of pounds and having a car seized if they were found driving under a false insurance policy.
He added: “If a policy looks too good to be true it usually is. These fraudsters will offer big discounts on policies to get business. People should check policies direct with insurance firms.”
Police today failed to find one suspect after raiding a house in Forest Gate and then visiting his workplace. Mr Wood eventually spoke to the 25-year-old man on his mobile at the side of the road. The suspect, who has changed his name by deed poll twice, promised to attend a police station later today. There were also raids in Manchester, High Wycombe and the West Midlands.
