A man has been sentenced for defrauding victims of £17,618 by selling fake car insurance policies on Instagram. Wahidullah Usmani, 22, from Cricklewood, operated as a “ghost broker,” a term used for individuals who sell invalid insurance policies, often through social media.
Ghost brokers misrepresent themselves as intermediaries for reputable insurance companies, claiming to offer legitimate coverage at significantly reduced prices. They forge documents and falsify details to lower premiums or take out genuine policies only to cancel them shortly after. Victims typically realize they lack proper coverage only when attempting to make a claim or being stopped by the police.
On June 6, 2024, Usmani pleaded guilty to fraud by false representation, conducting regulated activities without authorization, and money laundering. On July 24, 2024, he received a suspended 24-month prison sentence, required to complete a 15-day rehabilitation program, and ordered to pay £1,000 in costs.
Detective Sergeant Phil Corcoran from the City of London Police’s Insurance Fraud Enforcement Department (IFED) stated, “Usmani attracted victims with cheap insurance but left them with worthless policies. Ghost brokers prioritize their financial gain over everything else. It’s essential to verify that you’re purchasing from legitimate sources.”
The investigation began in January 2021 after LV= General Insurance identified a suspicious motor insurance policy. A policyholder revealed they bought insurance through Usmani’s Instagram account, @cheap_car_insurance_quotes, which claimed customers could “save up to 60% on every quote.” Further investigations linked Usmani to 13 fraudulent policies.
Usmani was arrested on April 14, 2021. Analysis of his mobile phone and bank records revealed he received £17,618 from victims between February 2020 and January 2021, with several payments tied to ghost broking activities.
The Instagram account has since been taken down.
Ben Fletcher, Director of Financial Crime at LV= General Insurance, emphasized the collaborative effort to tackle ghost broking, highlighting that fraudulent activities drive up costs for genuine customers.
Nicola Smith, Intelligence and Investigations Manager at the Insurance Fraud Bureau (IFB), noted, “Usmani exploited those struggling to afford insurance, costing victims their money and risking severe consequences for driving without valid coverage.”
According to IFB statistics, ghost broking incidents increased by 6% last year, with one in five individuals aged 18-24 using social media for car insurance searches, while only one in ten are aware of ghost broking.
Common Signs of a Ghost Broker:
- Unusually low insurance quotes
- Communication only through social media or messaging apps
- Unprofessional or poorly written advertisements
- Lack of a legitimate website, UK landline number, or physical address
- Upfront costs despite insurance pricing based on individual risk
To verify a broker’s legitimacy, check the Financial Conduct Authority or British Insurance Brokers’ Association websites. Victims of ghost broking can report to Action Fraud at actionfraud.police.uk or 0300 123 2040, or contact the Insurance Fraud Bureau via its Cheatline at 0800 422 0421.