Buyer Beware: Ghost Brokers Everything you need to know about ghost brokers, and how to protect yourself. by Team Onlia On The Road Dec 06, 2019 4 min read SHARE Finding an insurance provider that’s right for you can be a full-time job; comparing rates, choosing coverages, and finding a company that’s aligned with your needs is no small task. Many people use insurance brokers to help them do the leg work of comparing various providers. Less work for you, business for the broker – sounds like a sweet deal, right? It can be, but it’s not always that simple. Just like any other business, there are a few bad apples out there who can give the wrong impression about insurance brokers. They’ve earned a reputation of their own, and now have a name for themselves, too: ghost brokers. What are ghost brokers? Ghost brokers are fraudulent brokers who sell policies – that are either inaccurate or inactive – to unsuspecting customers. They usually operate their ‘business’ in one of two ways: They’ll set up an insurance policy using false information to offer an impossibly low premium. They won’t set up an insurance policy at all, and will send forged insurance documents to the policyholder. In addition to charging customers the full cost of their premium (which they’ll pocket), they’ll also charge a made-up fee to cover the costs of setting up a policy. How do you know if you’re working with a ghost broker? Ghost brokers often target newcomers to Canada – since they’re the most unfamiliar with the system, and therefore unlikely to identify unusual behaviour – though, anyone can be duped by these fraudulent brokers. Some drivers don’t realize that their policy is invalid until they go to make a claim, which can lead to a number of other problems. Here are some signs to look out for if you suspect that you’re working with an unlicensed broker: Your premium is unbelievably cheap An impossibly low price is a major red flag you’ll want to look out for. You can compare the price they offer by getting quotes from other providers on your own. They require a deposit Licensed brokers will never ask for a deposit or surcharge you for setting up your policy. You’ll only need to pay for your monthly premium, so if you’re ever asked for additional payments or deposits, it’s a good indicator that you may be working with a ghost broker. Their location Ghost brokers may not have a physical office location. They may ask to meet in a public space, or offer to come to your home. LIKE THIS ARTICLE? Subscribe & get more from Onlia Sign up for our newsletter and get our best stories delivered to your inbox. I agree to receive newsletters and special offers from Onlia, and understand that I can unsubscribe whenever I want. Thanks! You’ll hear from us soon. Hmm, something went wrong. Please try again later, or contact us for help. Sorry! Email me How they advertise They often depend on social media or word of mouth to get new business. If you find your broker in one of these ways, be sure to look them up online and try to validate the legitimacy of their business through their online presence, and any reviews from real customers. Process It can be suspiciously easy to set up a policy. They might ask fewer questions than a licensed broker. Contact information Using a personal email address – like a Gmail or Hotmail account – instead of a business one is another red flag. They may also contact you from a mobile phone number, or even text you. Looking up their phone number online is an easy way to tell whether it’s linked to a legitimate business or not. How can you avoid being duped by a ghost broker? Well, you can avoid using a broker altogether by purchasing your insurance online, yourself – there’s no one that’ll look out for your best interests as much as you will. Either way, the best way to safeguard yourself against scams like this is to do your research. Be sure to look up any brokers you plan to work with, as well as the brokerages they work for. The internet is a great resource where you can find reviews from real customers, assess the online presence of a business, and track down anything that might look a little fishy. If something seems too good to be true, it probably is. What should you do if you’ve been a victim of fraud? It can be tough finding out that someone’s scammed you out of thousands of dollars, and the peace of mind of having insurance. The good news is, the Financial Services Regulatory Authority of Ontario (FSRA) has a process in place for this. It’s important to look out for yourself, especially when it comes to things like insurance. It’s meant to keep you safe, and if you’re going to go through the effort to get a policy, you’ll want to be sure it’s legitimate. By keeping our tips in mind, you’ll be well equipped to weed out any questionable brokers that may approach you.