Car insurance scam: What is ghost broking? Four ways drivers can avoid fake policies

Car insurance scam: What is ghost broking? Four ways drivers can avoid fake policies


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Car insurance is vital for all motorists, yet a new scam by the name of ghost broking threatens not only to leave drivers without valid insurance but also out of pocket too. Senior fraud manager, Stephen Adams at, spoke with to share an insight into ghost broking and how drivers can avoid it.

According to data from Action Fraud, there were 351 reports of ghost broking between January and August 2021.

The majority of these were reported by drivers aged between 17 and 19, with individuals losing an average of £2,250 each as a result, along with the risk of driving with invalid insurance.

What is a ghost broking scam?

Ghost broking is a form of insurance fraud that sees victims unwittingly buying fake motor insurance policies.

Ghost brokers, the people behind the scam, are professional fraudsters who sell forged or invalid discounted insurance policies.

These scams are most usually advertised online, though can also be promoted within local communities.

Most typically, their main selling point is cheap motor insurance.

How can you spot and avoid a ghost broking scam?

Mr Adams told of the four key signs consumers should look out for when purchasing vehicle insurance and what to do if they suspect their details have been used by a ghost broker.

How they communicate with you

Reputable companies are always connected to a landline telephone number and should have this listed as the main point of contact on their official website.

Mr Adams said: “Usually, you wouldn’t find a ghost broker with a landline telephone number as they tend to use mobile numbers only, often communicating using WhatsApp or Facebook Messenger.”

These seasoned professionals also know how to sell a deal, and this can be noticeable in their use of language.

Mr Adams explained: “When being sold a deal if you’re having second thoughts, the ghost broker will have ways of redirecting doubt.

“This might involve dazzling you with jargon or confidence.”

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How they advertise their services

Adverts for car insurance deals on social media should be a major red flag, according to the expert.

He explained: “Scammers also tend to advertise on student websites, social media platforms and money-saving platforms, clearly targeting a younger audience.

“There are numerous ads on Instagram from ‘brokers’ promising to secure quality insurance at great prices, some particularly emphasising the legitimacy of what they offer, whilst others boast about their talents at covering the difficult to insure.”

Ghost brokers may also utilise comparison sites when fetching quotes for you.

Mr Adams also pointed out that they may even claim to work for well-known insurance companies.

He said: “Legitimate brokers will usually have direct relationships with the insurers and policies and would be able to find you the best quotes, so be sure to check against both and do your research.”

The price is too good to be true

According to the expert, if the price seems too good to be true – it most likely is.

He said: “Always keep in mind that if an insurance quote is considerably cheaper than several others you have received, there is every chance it is being offered by a fraudster.”

When buying car insurance it is a good idea to take note of all of the offers you have had, and compare them.

Mr Adams noted: “If they are all much more expensive, then alarm bells should be ringing.”

Checking customer feedback for the company is also a good idea to see how reputable the firm is that is quoting your deal.

Mr Adams added: “Be aware that whilst you would normally need to pay an ‘admin fee’ either before or after the policy is set up, ‘ghost brokers’ can tend to be controlling over the process.

“Sometimes they will even make the payment for you first and then forward paperwork for you to fill in, asking for the admin fee to be bank transferred directly to them instead of the insurance company.”

Always check the FCDO

A legitimate insurance broker with proper authorisation should appear on the Financial Services Register on the Financial Conduct Authority’s (FCA) website.

Mr Adams said: “If the ‘broker’ isn’t on there, doesn’t have their own website, or only discloses a mobile phone number or an email address as a contact, you should definitely be suspicious.”

What to do if your details have been used by a ghost broker

In the unfortunate event that your details have been used by a ghost broker, the first step is to contact the insurer and request for them to close down the policy.

Mr Adams explained: “This will prompt the insurance company to conduct further checks if someone does apply for a policy using your details again.”

Should you be involved in a scam, it is vital this is reported to Action Fraud.

Mr Adams urges customers to provide “as much information as possible on the ‘broker’ and how they contacted you”.

He added: “You can also contact the Insurance Fraud Bureau (IFB) cheat line or the Credit Industry Fraud Avoidance System’s (CIFA) registration.

“Keep an eye on your bank accounts just to make sure everything is as it should be.

“Also check your credit report as this will allow you to flag any searches made by companies you don’t recognise that could indicate a fraudulent application made in your name.”

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