Typically the scam works in one of two ways:

• Policies are bought from legitimate insurance companies using false information and then doctored before being sold on to unsuspecting customers
• Fake policy documents designed to look like they have been issued by legitimate insurance companies are created and sold on to customers

The consequences of buying a fake policy:

• Your car may be seized by police
• Pay at least £150 to get your car back from the pound
• You’ll pay a fixed penalty notice of £300
• You’ll have to buy valid insurance
• You could be liable for any damage you cause while driving without insurance, which could include compensation if you injure someone

How to beat the fraudsters:

To ensure you aren’t caught out, carry out essential checks before taking out a policy. This includes:

• Checking the party you are dealing with has a legitimate website, a UK phone number and a business address
• If buying through a broker, check they’re registered with British Insurance Brokers’ Association (BIBA)
• Check your insurance advisor is registered with the Financial Conduct Authority (FCA)
• If buying directly through an insurer, check they’re a member of Motor Insurers’ Bureau (MIB)

Source: Insurance Fraud Bureau