Ghost brokers target young drivers with fake car insurance online

Young drivers are increasingly being targeted by ‘ghost brokers’ who sell fake car insurance policies through social media and messaging apps, the Financial Conduct Authority has warned.

According to research from the Financial Conduct Authority, half of drivers aged 16 to 25 have purchased insurance policies via social media or messaging apps, many of which are fraudulent.

The FCA said victims often unknowingly drive without valid insurance, risking prosecution, fines, or having their vehicles seized.

These ‘policies’ are often suspiciously cheap, but the FCA added that many young drivers, stretched by cost-of-living pressures, are lured in by the low prices.

Driving without valid insurance is a criminal offense in the United Kingdom.

The Insurance Fraud Bureau and Aviva have both reported an increase in ghost broking in recent years.

The FCA’s Firm Checker can be used to confirm whether a broker is authorized.

Legitimate insurance brokers should have a website, phone number, and address, the FCA said.

Amie Donaghey, 21, told BBC News NI that she was left with a criminal conviction after being conned by a ghost broker.

She only realized she had bought a fake policy when she was stopped by police and discovered she was not insured.

Amie said she was quoted a price that was ‘a fraction’ of the £4,500 that high-street insurance companies were charging.

When Amie tried to contact the ‘broker’ after realizing she had been scammed, she said he ‘ghosted’ her. ‘I was blocked on everything,’ she said.

The FCA, which surveyed 1,000 drivers, said many ghost brokers pose as legitimate insurance sellers but offer cheap rates.

The policies are often completely bogus, are invalid because they falsify information to bring the price down, or are canceled soon after purchase.

Graeme Reynolds, director of insurance at the FCA, said that ‘tight budgets make cheap offers tempting – and scammers take advantage of that.’

‘Don’t get ghosted by a policy that doesn’t exist. Check the FCA Firm Checker before you buy. Driving uninsured could cost you far more than any premium,’ he said.

The FCA is working with social media influencers to warn young drivers about the growing threat of ghost broking.

The watchdog urges all drivers to verify any broker’s authorization through the FCA Firm Checker before purchasing insurance.