The guidance on this site is based on our own analysis and is meant to help you identify options and narrow down your choices. We do not advise or tell you which product to buy; undertake your own due diligence before entering into any agreement. Read our full disclosure here.

What is flash for cash? Car insurance scams to be aware of

Most of us will be alert to email and phishing scams. But how many of us are aware of car insurance scams and the various ways that fraudsters try and manipulate us and insurers? We identify three common methods that criminals use so that you don’t get caught out.

Flash for cash

This happens when a fraudster flashes their headlights at a junction, as if they were giving you right of way. As you move out into the flow of traffic, they will then accelerate, causing you to crash into them. If questioned, they will deny they flashed their headlights at you.

In most of these scenarios, criminals will make an insurance claim for damage as well as personal injury. They may even make false claims for non-existent passengers in their car. Depending on how far the criminals want to take the claim, they could also demand compensation for time off work.

Remember that although many of us flash headlights to let others pass and assume it’s an invitation to do likewise, it actually has no grounds within the official Highway Code.

In fact, rule 110 in the code states:

“Flashing headlights. Only flash your headlights to let other road users know you are there. Do not flash your headlights to convey any other message or intimidate other road users.”

Rule 111 is even more explicit and states:

“Never assume that flashing headlights is a signal inviting you to proceed. Use your own judgement and proceed carefully.”

Sadly, flash for cash is difficult to prove as it ultimately comes down to one person’s word against another. To avoid being scammed and having to pay out to criminals, always be cautious and only move out of junctions when you feel it is safe to do so.

Crash for cash

Crash for cash is very similar to flash for cash. The Association of British Insurers (ABI) has identified the main methods used in this type of scam:

  • Ghost accident – when no actual accident takes place, but criminals submit false claims to insurers.
  • Staged accidents – criminals use their own cars to stage an accident in order to make false claims.
  • Induced accidents – when fraudsters involve innocent drivers and cause a crash on purpose. This could be because criminals have disabled their brake lights, stop suddenly, or drive erratically, causing you to crash into them.

You can avoid becoming a victim of a crash for cash scam by making sure you keep a good distance between you and the car in front (where it is practical to do so). Also, stay alert to what is going on around you, if you spot an erratic driver, move to another lane if you can, and keep back.

In the aftermath of an accident, most of us will be in shock and not necessarily thinking about whether or not the accident was genuine or induced. However, the Insurance Fraud Bureau has some signs to look for which could indicate it’s a scam:

  • The other driver (and their passengers) seem unfazed by the accident.
  • Injuries are exaggerated and don’t seem consistent with the incident.
  • Insurance information is pre-written and quickly accessed.

Ghost broking

Ghost broking is when you’re sold an insurance policy by someone claiming to be an insurance broker. Inevitably, they aren’t genuine, and the policy turns out to be non-existent or invalid.

In most cases, the victim is completely unaware they’ve been scammed until they try and make a claim and find their policy doesn’t exist or that it’s been falsified.

There are three main methods that ghost brokers use:

  • The cancelled policy – this is when a genuine policy is taken out but is then cancelled by the fraudster. They then claim the refund leaving you without insurance.
  • The forged policy – the ghost broker will simply forge documents to make you think you’ve got cover.
  • The falsified policy – the policy is real, but details have been falsified in order to lower the cost so that it looks as if they’ve found you a great deal.

Ghost brokers are particularly deceptive, and this type of scam is more elaborate than a criminal simply slamming on their brakes in front of you. It’s also a scam that has direct consequences for you, the victim. That’s because you must have valid car insurance, if you don’t, you’ll face penalties.

In the eyes of the law, it makes no difference whether you’re intentionally driving without insurance or whether you’re the victim of a ghost broker. It’s unfair, but as it stands, you’ll be treated like any other uninsured driver.

The penalties for driving without insurance include a fixed penalty fine of £300 and six penalty points on your driving licence. If your case goes to court, you could be given an unlimited fine and even be disqualified from driving.

You can avoid being scammed by making sure any insurance broker you use is authorised by the Financial Conduct Authority (FCA). Also, ask yourself if a deal seems too good to be true; if it does, it probably is.

What to do if you think you’ve been a victim of a car insurance scam

If you think you’ve been a victim of a car insurance scam such as flash for cash or crash for cash, don’t confront them. Instead, take as many details as you can. For example, number plate, car make and model and if you can, photos of the scene.

You should also report all incidents of car insurance fraud to the Insurance Fraud Bureau’s Cheatline, which is confidential. You can also call them on 0800 422 0421.

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The guidance on this site is based on our own analysis and is meant to help you identify options and narrow down your choices. We do not advise or tell you which product to buy; undertake your own due diligence before entering into any agreement. Read our full disclosure here.

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