A significant increase in fraudulent insurance practices targeting young drivers has been identified, with victims losing an average of £2,000. According to data from the insurance company Aviva, individuals aged between 17 and 25 are the most affected by these scams, often perpetrated by so-called “ghost brokers” operating primarily on social media platforms.
These fraudsters present themselves as legitimate insurance intermediaries, selling fake motor insurance policies to those struggling to secure affordable coverage. New drivers, who typically face higher premiums, are particularly vulnerable. The scams often appear convincing, leading victims to believe they are purchasing valid insurance, only to find out later that their policies are worthless, forged, or canceled without their knowledge.
Victims usually pay around £1,700 for the bogus policy and an additional £300 in finder’s fees. Despite the evident risks associated with using brokers found on platforms like TikTok, Instagram, and Facebook, Aviva reports a marked increase in ghost broking incidents compared to 2024, indicating a troubling trend that appears to be worsening.
Understanding the Mechanism of Ghost Broking
Ghost brokers typically manipulate legitimate insurance documents by providing false information, allowing them to sell these altered policies at a significantly reduced rate. The fraudulent practices may involve creating completely fake documents or modifying real insurance policies by changing critical details, such as the driver’s address or claims history, ultimately invalidating the coverage.
Many victims do not realize their insurance is invalid until they are stopped by law enforcement or involved in an accident. The consequences of being caught driving without valid insurance can be severe, including a fixed penalty of £300, six penalty points on the driver’s license, and potential court proceedings, which could lead to unlimited fines and driving bans.
In worst-case scenarios, the police may seize and crush the uninsured vehicle. To retrieve it, drivers must pay a minimum fee of £150 and obtain legitimate insurance.
Prevention and Awareness Measures
The Insurance Fraud Bureau (IFB) has outlined several red flags that may indicate a ghost broker. These include unrealistically cheap insurance quotes, communication limited to private messages, unprofessional advertisements, and the absence of a legitimate website or contact details.
To mitigate the risk of falling victim to such scams, potential buyers are encouraged to verify the legitimacy of sellers. This includes ensuring that the insurance broker is registered with the British Insurance Brokers’ Association, confirming that an insurer is a member of the Motor Insurers’ Bureau, and checking registrations with the Financial Conduct Authority.
Owen Morris, UK personal lines chief executive at Aviva, expressed concern about the growing prevalence of ghost broking. He stated, “Ghost broking is a fast-growing criminal enterprise that targets young drivers on social media sites. These fraudsters exploit social media to sell worthless insurance, leaving victims thousands of pounds out of pocket and at risk of prosecution.”
Morris’s warning underscores the importance of vigilance among young drivers when purchasing insurance online. He advises always checking the seller’s authenticity before making any payments, highlighting that the consequences of falling for such scams can extend beyond financial loss to future risks of identity and banking fraud.
Anyone who believes they have been a victim of ghost broking or other fraudulent activities is urged to report their experiences to the CheatLine or contact the helpline at 0800 422 0421.
