The Ghost Broking Trap: How Fake Insurance Policies Are Costing Drivers Thousands
For many young people in the UK, the dream of driving is being shattered by a sophisticated online scam known as 'ghost broking'. After the immense costs of driving lessons, a first car, and the test itself, new drivers face another hurdle: sky-high insurance premiums. This is where the fraudsters strike, offering a tempting but dangerous shortcut.
How the Scam Operates Online
Criminals now use a blend of social media ads and AI-generated websites to pose as legitimate insurance brokers. They promise policies for a fraction of the market rate. In one real example, a 23-year-old was quoted just £586 a year for an Audi A3, a price designed to attract immediate attention.
The process is deceptively simple. Victims click on an ad, enter their personal details on a fake site or via a messaging app, and are instructed to pay by bank transfer. For a fee of a few hundred pounds, they receive an insurance certificate by email. However, this document is completely worthless.
According to Kat Cunningham, the underwriting fraud lead at Aviva, the criminals employ one of two methods. They either create a forged certificate from scratch, or they take out a real policy with a legitimate company but lie about the driver's age and occupation to get a cheaper quote. They then alter the genuine certificate and send it to the victim, pocketing both the fee and the price difference.
The Devastating Consequences for Victims
The harsh reality of the scam only becomes clear when it is too late. Drivers typically discover they have been duped in one of three situations: when they are stopped by the police, when they need to make a claim, or when they are involved in a car accident.
At this point, a check reveals the insurance is invalid. The consequences are severe. Motorists can face court, a driving ban, and have their car seized and destroyed. To make matters worse, the personal data they provided is often sold on the dark web.
Aviva reports that this type of fraud is on the rise, with a 22% increase in detected cases this year compared to 2023. The average victim loses around £2,000. In a stark example of the scale of this crime, one fraudster is believed to have made £150,000 from selling 550 fake policies.
How to Protect Yourself from Ghost Brokers
Staying safe requires vigilance, especially for young drivers who are the primary targets. Here are the key steps to take:
- Be extremely wary of anyone selling insurance directly through social media ads, particularly if the price seems too good to be true.
- Always ensure your insurance broker is registered with the Financial Conduct Authority (FCA). You can check this on the FCA's official website.
- If you suspect you are a victim, contact the Insurance Fraud Bureau’s CheatLine on 0800 422 0421 or report it to Action Fraud, the national fraud reporting centre.
- If you have any doubts about your policy, contact the insurance company directly to verify your cover.
The promise of cheap car insurance can be alluring, but falling for a ghost broker can have long-lasting and costly repercussions. Always verify before you buy.
