Haunted by debt col­lec­tion threat

The Daily Telegraph - Your Money - - READERS’ LETTERS -

My wife and I have lived here since we re­tired in 2004. Yet we have re­ceived let­ters from Hast­ings Di­rect ad­dressed to some­one who doesn’t live here. I have writ­ten to Hast­ings Di­rect but it is not re­spond­ing. It is, how­ever, writ­ing to the stranger at our ad­dress say­ing that, if the out­stand­ing bal­ance is not paid, it will pass his file to a debt col­lec­tion agency. JB, NORTH YORKS

I un­der­stand that some­one had set up a pol­icy on­line us­ing your ad­dress but giv­ing a dif­fer­ent name.

Fur­ther to my in­volve­ment what turns out to have been a fraud­u­lent pol­icy has been can­celled.

Hast­ings Di­rect as­sured me you wouldn’t hear any more about this.

It said: “We are com­mit­ted to tack­ling fraud and in­vest sig­nif­i­cantly in our anti-fraud sys­tems and team who, so far this year, have taken ac­tion against 33 ‘ghost-broking’ rings.”

Ghost broking takes sev­eral forms but usu­ally oc­curs when an in­di­vid­ual or group pos­ing as an in­sur­ance bro­ker will of­fer bo­gus in­sur­ance poli­cies that are too cheap to be true. Th­ese “ghost bro­kers” ini­ti­ate poli­cies for a fee on be­half of cus­tomers us­ing some gen­uine and some false de­tails in or­der to bring down the premium.

They will com­plete an ap­pli­ca­tion with an in­sur­ance com­pany, of­ten

us­ing an ad­dress in an area rated low risk by in­sur­ers. Small ven­tures usu­ally op­er­ate by word of mouth, per­haps in a pub or laun­derette. Some­times they ad­ver­tise on so­cial me­dia.

Of­ten they tar­get young peo­ple who face high pre­mi­ums or peo­ple for whom English is not the first lan­guage and who don’t un­der­stand how in­sur­ance works in Bri­tain.

More of­ten than not they ask the per­son buy­ing the pol­icy for the full amount in cash. This sum will ex­ceed what the in­surer is paid. It will of­ten be just the first month’s premium rather than the an­nual one the “pol­i­cy­holder” thought they were pay­ing for.

When the in­sur­ance

com­pany de­tects that the pol­icy is false it will can­cel it. The per­son who has bought it may know this has hap­pened only when they go to make a claim or try to query some­thing about the pol­icy.

Oth­er­wise a pol­icy may sim­ply be forged.

You can learn more at in­sur­ance­fraud­bu­reau.org or via 0800 422 0421.

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