Beware Of False Agents & Fraudulent Policies

Scammers have been known to pose as insurance agents selling cheap, fraudulent policies to consumers who think they're obtaining legitimate coverage from a licensed insurer. Victims may not discover they've been scammed until they file a claim — only to be told that their policy is not in force with the company.

Doing business with these false insurance agents, sometimes called "ghost brokers," could put you, your family and your finances at risk.

Consider the following to help avoid becoming a victim of this type of insurance fraud. Ghost brokers may apply for a genuine policy in your name, keep your premium payments, then cancel the policy shortly after — all without your knowledge. This practice allows the fraudsters to deceive un- suspecting "customers" into thinking they have a legitimate policy. The victim may only find out that the policy was canceled after they have to make an insurance claim.

Ghost brokers typically advertise cheap insurance on social media sites or messaging apps. In fact, insurance fraudsters typically tout policies that are much cheaper than competitors' policies, according to the National Association of Insurance Commissioners. If a so-called agent's insurance rate seems too good to be true, it probably is.

These watch-outs may help you spot a fraudulent insurance agent. Be wary of:

• Agents who advertise cheap insurance on social media sites or messaging apps.

• Agents who communicate solely via social media or email. The NAIC says fraudsters may not list a phone number or may be difficult to reach via phone.

• Agents who ask for cash-only payments in person, through social media or via cash-transfer mobile apps, according to PropertyCasualty360.

• Agents who promise to secure an insur ance policy for you without providing any direct communication or docu ments from the insurance carrier.

• Don't sign any paperwork until you've checked that the agent is licensed.

• Be wary of agents who demand cash-only payment. Don't make any payments until you've confirmed the agent's license.