Ghost Broking: The Car Insurance Scam Costing UK Drivers Thousands

Ghost broking is a growing problem in the UK, with a 30% rise in cases since 2019. In 2024, the average victim of ghost broking lost £2,206, not only from the initial scam but also from accident damages and fines for driving uninsured. Young drivers, particularly those in cities like Worcester, Birmingham, and London, where insurance is at a premium, are being targeted through social media, where fraudsters pose as legitimate brokers offering unrealistically cheap car insurance.

At Sutcliffe & Co Insurance Brokers, we’re here to help you recognise the warning signs of ghost broking, protect yourself from fraud, and ensure you have legitimate car insurance that keeps you safe on the road.

What Is Ghost Broking?

Ghost broking is a type of insurance fraud where scammers sell fake or invalid car insurance policies to unsuspecting drivers. They often do this in one of three ways:

• Forging insurance documents – creating fake policies that appear real but hold no value.
• Manipulating genuine policies – using false information, such as a lower-risk postcode, to secure a cheaper price.
• Buying and cancelling real policies – obtaining a policy in a customer’s name, then cancelling it to pocket the refund.

Victims believe they are fully insured until they need to make a claim or are pulled over by the police. Only then do they realise their policy is fraudulent.

How Is Ghost Broking Done?

Scammers operate primarily through social media platforms like Facebook, Instagram, TikTok, and Snapchat. They target young and inexperienced drivers searching for the cheapest insurance deals. Fake websites and professional-looking invoices make their services appear legitimate, tricking even cautious customers.

Common warning signs include:

• Unrealistically low prices compared to official insurance providers.
• Dealing exclusively via social media or messaging apps rather than a registered business.
• Lack of FCA registration – real insurance brokers must be authorised by the Financial Conduct Authority (FCA).

Who Is Most at Risk of Ghost Broking?

Young drivers are most vulnerable to ghost broking scams. With the cost of car insurance continuing to rise, many are tempted by offers that seem too good to be true. Students, new drivers, and those struggling to afford insurance are often the main targets.

According to the Insurance Fraud Bureau (IFB), cases of ghost broking have been particularly high in urban areas, where more people rely on social media to find financial deals they can afford.

The True Cost of Falling Victim to Ghost Broking

If you unknowingly purchase a ghost-brokered policy, you could face:

• Losing money to fraudsters – with no real policy, your money is gone.
• Driving without valid insurance – which can lead to a £300 fine, six penalty points, or even vehicle seizure.
• Liability for accident damages – uninsured drivers must cover all costs if they cause an accident.

The financial and legal consequences of ghost broking far outweigh any short-term savings.

How to Avoid Ghost Broking Scams

To protect yourself from ghost broking, follow these steps:

1. Check the Broker’s Legitimacy

• Verify the broker’s credentials on the Financial Conduct Authority (FCA) website (www.fca.org.uk).
• Confirm they are listed with the British Insurance Brokers’ Association (BIBA).

2. Avoid Social Media Deals

• Be cautious of insurance deals found on Facebook, Instagram, TikTok, or WhatsApp.
• Legitimate brokers have professional websites and contact details, not just social media accounts.

3. Contact the Insurer Directly

• If you receive policy documents, call the insurance provider to confirm your policy is active.

4. Be Wary of Extremely Low Prices

• If a deal seems too good to be true, it probably is. Compare quotes from trusted UK insurers before committing.

5. Use a Trusted Local Broker

• Working with an established insurance broker in Worcester, Birmingham, or surrounding areas ensures you receive genuine, FCA-approved coverage.
• Get Real Insurance with Sutcliffe & Co.

At Sutcliffe & Co Insurance Brokers, we provide trusted car insurance solutions for young drivers across Worcestershire and the UK. Our team of FCA-registered insurance specialists will help you find affordable young drivers car insurance with the right level of cover, without the risk of scams.

If you are a young person, or know a young person, in need of genuine car insurance, or want to verify a policy, contact us today at 01905 21681 or visit www.sutcliffeinsurance.co.uk/personal-insurance/young-drivers-insurance/