A consultant has been arrested following an investigation into the sale of bogus motor insurance, known as ‘ghost broking’, through a phony company called Personal Touch Insurance.

City of London Police’s Insurance Fraud Enforcement Department (IFED) believes as many as 150 drivers, mainly in Hampshire and Dorset, have fallen victim to the scam and collectively lost around £60,000.

A report by Insurance Age has revealed that 33-year-old man from Andover in Hampshire has been arrested on suspicion of fraud by false representation and money laundering.

Detectives are also appealing for other potential victims to come forward following the drivers who initially notified Action Fraud that they had bought motor insurance from Personal Touch Insurance’s website and later found it was invalid.

Action Fraud sent the reports to the National Fraud Intelligence Bureau (NFIB), both key components of the City of London Police’s capability as the national policing lead for fraud.

The NFIB’s Cyber Prevention and Disruption Team identified the company’s website as bogus and shut it down.

The IFED was then handed referrals from two insurers which reported drivers being fraudulently added to motor trade insurance policies.

Ghost brokers target drivers with cheap motor insurance policies but they are fraudulent, and anyone who buys one will not be insured.

This could lead to victims getting their car seized by police, fines, penalties and a criminal record. Uninsured drivers would also have to pick up the bill for any damage or injuries they caused in a crash.

Detective Sergeant Mark Forster, who is leading IFED’s investigation, said: “Ghost broking is a priority for us which we are tackling alongside the insurance industry and local law enforcement.

“The consequences for motorists who fall victim to these scams can be dreadful, so it is vital that drivers shopping for car insurance online, or through other means, question what they are being offered to ensure they get a real deal.”