A man from Hull has been jailed after he admitted to setting up fake car insurance policies for hundreds of people.
Nigel Fox used his prior insurance broking knowledge to set up the policies and to create fake no claims discount letters, which were used to significantly lower the price of premiums.
The 49-year-old, of Diadem Grove, was yesterday jailed for 12 months when he appeared at Hull Crown Court.
It follows an investigation City of London Police’s Insurance Fraud Enforcement Department (IFED), which received a referral from the Insurance Fraud Bureau (IFB) in 2015.
How the investigation into the 'ghost broker' began
Working with several insurers, the IFB had discovered that a significant number of motor vehicle policies were being set up using similar details such as the IP address, email and property risk addresses, and credit card details.
These details led the IFB to Fox, and their early investigation revealed that his fraudulent activity had been ongoing since 2009.
The IFED went on to establish that Fox acted as a ghost broker, and used false personal details to incept numerous fake motor insurance policies for people.
He also created fake no claims discount letters (NCDs), which he submitted to insurance companies to significantly lower the price of the premium.
It appears Fox operated solely from the Hull area, while the people who he set up policies for were based all across the UK, predominantly the North East.
Man used insurance knowledge to manipulate system
Research carried out by IFED into Fox revealed that he had previously been employed as an insurance broker for a company in Hull and that because of this professional experience he had knowledge of insurance practices and the industry.
He knew how the price of insurance premiums were calculated, and most notably, how he could manipulate customer details to help lower their policy costs.
Fox stated that he did not change his contact work mobile number after he left his previous employment and, as a result, continued to receive calls from the customer base of 5,000 people built up during his time at the company in Hull.
In an interview with IFED officers, Fox went on to admit that he arranged policies for those who contacted him.
When IFED officers put a figure of roughly 7,000 to Fox for the amount of quotes he had made for people, he accepted it was accurate.
In a separate interview, Fox also stated that he set up motor insurance policies for ‘hundreds’ of people between 2009 and 2015.
Fox mainly used price comparison websites when setting up the fake policies, and his activity spanned across multiple websites.
On one website, several hundred policies had been bought using the same personal details, which linked them to Fox.
It is estimated that Fox gained roughly £25,000 from his ghost broking activity.
"He defrauded a number of innocent members of the public" - detective
Detective Constable Peter Gartland, who led the Insurance Fraud Enforcement Department's investigation, said: “It’s clear that Fox used his prior knowledge of the insurance industry to deceive multiple insurance companies and manipulate their policies so that he could offer them at a cheaper price.
“On top of this, he defrauded a number of innocent members of the public with offers of fraudulent cheap insurance and exposed them to the direct harms caused by ghost broking, such as points on their licence and possible seizure of their car. It seems his fraudulent activity also helped facilitate local criminal gangs as their vehicles were insured to appear legitimate.
“This case is just one in a series of investigations where the IFB and the insurance industry has shared valuable intelligence with IFED to help us convict insurance fraudsters, including ghost brokers, and bring them to justice.”
Jason Potter, IFB’s head of investigations, added: “Fox was a particularly manipulative individual who was willing to go to great lengths to deceive members of the public in order to line his own pockets.
"We are pleased that the collaborative work between IFB, IFED and our insurer members has been successful in bringing Fox’s criminal activities to light.
“We hope that this sentencing sends a clear message to anyone considering carrying out an insurance fraud scam that the industry is committed to tackling this serious issue and we are dedicated to working together in order to ensure these fraudsters get the justice they deserve.”