A 30-year-old acting as an unauthorised – or “ghost” – broker has been convicted for his involvement in a fraudulent motor insurance scheme targeting the Sudanese community.
Hafiz Mohammad, from Polygon Street, Manchester, was found guilty of selling illegitimate policies to individuals, many of whom had limited English proficiency.
The scheme involved Mohammad charging six policyholders fees ranging from £120 to £180 to arrange insurance. A seventh policyholder paid £1,016, under the impression they were purchasing a full year's insurance. Unbeknownst to them, Mohammad falsified details on the policies to reduce premiums, resulting in invalid insurance coverage.
Mohammad pleaded guilty to eight counts of fraud by false representation at Manchester Crown Court on December 14, 2023. On January 15, 2024, he received a 10-month sentence, suspended for 12 months, is required to complete 150 hours of unpaid work, participate in a 15-day rehabilitation activity, and pay victim compensation.
Detective constable Deborah O’Loughlin-Whitby from the City of London Police’s Insurance Fraud Enforcement Department (IFED) highlighted the impact of ghost broking. She emphasised the serious consequences for victims, including invalid insurance and potential legal and financial repercussions.
"We urge people to be wary of cheap deals on social media and via messaging apps. If you’re unsure whether an insurance broker is legitimate, check the British Insurance Brokers’ Association (BIBA) or Financial Conduct Authority (FCA) website for a list of all authorised brokers.”
The case came to light following an investigation by LV= General Insurance's fraud team, which uncovered six suspicious policies. Further inquiries with the Insurance Fraud Bureau led to the discovery of additional fraudulent policies linked to Mohammad’s residence, involving a second insurer, esure.
IFED officers and the LV= fraud team linked Mohammad to a total of 13 fraudulent policies issued from December 2018 to February 2020. Mohammad was arrested on July 2, 2020, and electronic devices were seized from his residence.
Ben Fletcher, director of financial crime at LV= General Insurance, stressed the seriousness of ghost broking.
“We welcome tougher regulations across social media platforms through the Online Safety Bill to protect vulnerable people and prevent the continued rise of ghost broking. Our referrals of these cases to the police have risen significantly over the last few years and we're determined to tackle it. This sentencing should send a warning to fraudsters that we will act and bring them to justice,” Fletcher said.
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