He was looking for cheap car insurance in N.L. He thinks he found a 'ghost broker' instead
Fraud-fighting organization offers tips on how to avoid becoming a victim
A St. John's man was recently shopping around for deals when his car insurance came up for renewal.
As he scanned through WhatsApp groups mainly aimed at newcomers to Newfoundland and Labrador, he came across someone advertising car insurance.
Out of curiosity, he messaged them, and they messaged back.
It was a bargain rate — about $180 a month, when other quotes he was getting, as a new driver, were nearly double that.
"My skepticism was just going all over the place," he said in a recent interview.
"I wasn't sure of the price. Although it seemed too good, I wanted it. But just from my experience, I knew there was something wrong going on."
CBC News has agreed not to identify him, because of concerns for his safety.
He had sent the supposed insurance broker personal information before he realized what was going on, and is now concerned about comments the broker made online about trying to find him — comments he perceives as threatening.
And there was a catch: a requirement to e-transfer hundreds of dollars to secure that rate.
The email address was also a telltale sign of trouble. It looked similar to a major insurance company, with just one letter in the difference.
He began sleuthing around online, and found that the domain had only been registered in January. There was a contact name and phone number, but nothing to indicate any links to a legitimate insurance company.
That led him to only one conclusion.
"It's just some random John Doe making up this stuff and trying to scam people out of money," he said.
Instead of a deal on car insurance, he is convinced he found a "ghost broker" instead.
CBC News attempted to reach the person he was dealing with. Emails went unreturned, and the phone number has been disconnected.
The administrator of the domain set up for the email account did reply, but only to deny any knowledge about the situation, even saying they didn't know where St. John's is.
Association says newcomers, young drivers targeted
Équité Association is a national, not-for-profit group that works with insurance companies to fight fraud.
"We are seeing an uptick in fake insurance and ghost brokers," said Betty Ng, the organization's director of investigative services in Ontario.
Ghost brokers can create falsified insurance documents that look like legitimate policies, and sell them to unwitting victims.
"They go outsourcing their customers, like newcomers to Canada, or young drivers who are mostly inexperienced with the insurance system, or through social media," Ng told CBC News.
Équité Association offers a number of tips on how to recognize a ghost broker scam.
Those include much lower prices; a request for cash deposits without giving a receipt; a preference to only communicate through social media or a messaging app; use of a personal, and not business, email address.
"If the price is too good to be true, it is too good to be true," Ng said.
'Don't take the deal'
There is no evidence, at this point, that ghost brokers are a significant problem in Newfoundland and Labrador.
Neither the RNC nor the RCMP has seen any cases that match the "ghost broker" description.
The Department of Digital Government and Service N.L., which oversees the insurance industry, says it has not received any complaints related to ghost brokers, so it hasn't conducted any investigations on the issue.
But it has become a concern elsewhere.
Last fall, Alberta's insurance regulator issued an alert to consumers about ghost brokers.
In late September, Alberta superintendent of insurance Chris Merriman said there had been an increase in reports of "unscrupulous individuals purporting to offer automobile insurance."
Back in St. John's, the man looking online for car insurance said he realized something was definitely wrong after reading a CBC story from Alberta.
He ticks several of the boxes that the industry says flag potential targets of ghost brokers. He first came to the province as an international student, and has only been driving for two years.
He says he wanted to share his story to warn others — to tell them that what may seem like a bargain at first, may turn out to be more trouble than they bargained for.
"Don't take the deal," he said.
"I know it's going to save you a bit of money right now, but God forbid you get into a crash or there is something serious where you need your insurance, you're going to get caught eventually."
In the end, he didn't lose any money himself, but is urging others to be careful about their dealings online, and echoed Ng's comments.
"Remember, if something's too good to be true, it is too good to be true."
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