What is car insurance ghost broking and how can I avoid it?

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Ghost broking is a type of car insurance scandal where criminals sell fake car insurance policies to drivers, often on social media. It’s growing and it’s costing drivers an estimated 78 6,786,700 so far this year, with each victim losing an average of £ 2,268.

Here, I take a look at how ghost broking works and how to avoid being deceived.

How does ghost broking work?

Ghost broking works by misleading drivers into thinking they are buying an actual car insurance policy. Criminals set up fake accounts on social media such as Instagram. They often look like real insurance brokers and it’s hard to say they’re actually fraudsters.

They sometimes use legal insurance companies to provide insurance cover but they get a cheap quote for lying about the details. Other times the documents they provide are completely fake.

The driver has an invalid insurance policy and runs the risk of driving without coverage.

Who is more at risk of ghost brokerage?

Action Fraud says young drivers between the ages of 17 and 29 are special targets for fraudsters. This is because they face higher car insurance premiums and may split with their cash for a cheaper policy online.

But the victims of such scams are not limited to young drivers. In fact, 66% of driver ghost brokers reporting action fraud are over the age of 29.

What should you look for?

Here are some red flags so you can see ghost brokers when shopping for car insurance:

  • No website – Legal car insurance companies must have an official website.
  • Unusual sales channel – Beware of advertising brokers on social media and pubs, clubs, news agents and motor repair shops.
  • No landline phone number – If they only have a social media profile with a mobile number and email address, they have a good chance of not being valid.
  • Using the price comparison website – A proper broker gets quotes directly from an insurance company instead of using a price comparison website.
  • Not on the FCA website – Car insurance companies are regulated by the FCA and should appear on the FCA website.

What are the risks of ghost brokerage?

If you suspect you may not have valid insurance, you need to sort it out. Driving without valid insurance is a criminal offense. Here are some risks:

  • You will not be involved in a car accident and may have to pay higher insurance premiums in the future.
  • If you are stopped by the police while driving, you could be fined and get points on your license. You may even get a driving ban.
  • In the worst case scenario, you can even get your car stuck or crushed.

What should you do?

If you think you may be a victim of ghost brokerage, here is what you should do:

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