A stark warning has been issued to online car insurance buyers following the conviction of Wahidullah Usmani, 22, from Prayle Grove, Cricklewood, who orchestrated a scam netting £17,618. Usmani operated as a ‘ghost broker,’ deceiving victims with fraudulent insurance policies sold primarily through social media and messaging platforms.
Ghost brokers deceive customers by posing as intermediaries for well-known insurance companies, promising significantly lower rates. They achieve this by falsifying insurance documents, altering customer information to reduce premiums, or initially securing a genuine policy only to cancel it shortly after. Often, victims discover the fraud only when a claim is denied or during a police stop.
On June 6, Usmani admitted guilt to charges of fraud by false representation, unauthorized regulated activity, and money laundering at Inner London Crown Court. He was sentenced on July 24 to 24 months in prison, suspended for the same period. Additionally, Usmani is required to complete a 15-day rehabilitation program and pay £1,000 in costs.
Detective Sergeant Phil Corcoran of the City of London Police’s Insurance Fraud Enforcement Department (IFED) commented, “Usmani lured victims with promises of cheap car insurance, only to leave them with worthless policies. Ghost brokers prioritize their financial gain over consumer protection. Given the rising insurance premiums, it is crucial to verify the legitimacy of the insurance provider.”
The case was referred to IFED in January 2021 by LV= General Insurance, which had flagged a potentially fraudulent policy. The policyholder reported buying insurance from a broker via an Instagram account named @cheap_car_insurance_quotes, which advertised discounts of up to 60 percent. Investigations linked this account to Usmani and uncovered 13 additional fraudulent policies.
Usmani was arrested on April 14, 2021. Evidence from his mobile phone confirmed his management of the Instagram account. Analysis of his bank records revealed total payments of £17,618 between February 2020 and January 2021, with £2,888 attributed to the LV= policies and an additional £4,319 from further fraudulent activities. Nineteen other payments were suspected to be connected to ghost broking.
The @cheap_car_insurance_quotes account has been removed. Ben Fletcher, Director of Financial Crime at LV= General Insurance and Allianz, praised the outcome, stating, “This result underscores our commitment to combating insurance fraud and protecting genuine customers from inflated costs.”
Nicola Smith, Intelligence and Investigations Manager at the Insurance Fraud Bureau (IFB), added, “Usmani exploited those struggling with insurance costs, enriching himself at their expense and exposing them to significant legal risks.”
This case serves as a cautionary tale for those seeking bargains on car insurance online, emphasizing the importance of verifying the authenticity of insurance offers.
