Young drivers are being increasingly targeted by ‘ghost brokers’ who sell fake car insurance policies online, the Financial Conduct Authority (FCA) has warned. Research from the FCA indicates that half of drivers aged between 16 and 25 have purchased insurance through social media or messaging apps, with many of these policies proving to be fraudulent.
The FCA highlights that victims are often unknowingly driving without valid insurance. This puts them at risk of prosecution, fines, and having their vehicles seized. These bogus policies are frequently advertised at suspiciously low prices, a tactic that preys on young drivers struggling with the current cost of living pressures.
Driving without valid insurance is a criminal offence in the UK. Both the Insurance Fraud Bureau and insurance company Aviva have reported a recent uptick in ghost broking activities.
How Ghost Broking Works
Ghost brokers typically pose as legitimate insurance sellers, offering significantly cheaper rates than established providers. However, the ‘policies’ they sell are often entirely bogus. In other cases, the policies are invalid because the broker falsified information to reduce the price, or they are cancelled shortly after purchase.
Victim’s Experience
Amie Donaghey, 21, shared her experience with the BBC, detailing how she ended up with a criminal conviction after being defrauded by a ghost broker. She only discovered her policy was fake when she was stopped by the police and found to be uninsured. Ms. Donaghey reported being quoted a price that was ‘a fraction’ of the £4,500 quoted by high-street insurance companies. When she attempted to contact the broker after realising she had been scammed, she found herself blocked on all platforms, effectively ‘ghosted’.
FCA Advice and Warnings
Graeme Reynolds, director of insurance at the FCA, stated, ‘Tight budgets make cheap offers tempting – and scammers take advantage of that.’ He urged consumers, ‘Don’t get ghosted by a policy that doesn’t exist. Check the FCA Firm Checker before you buy.’ Reynolds also cautioned that ‘Driving uninsured could cost you far more than any premium.’
The FCA recommends that legitimate insurance brokers should possess a website, a phone number, and a physical address. Consumers can verify if a broker is authorised by using the FCA Firm Checker tool. The FCA is collaborating with social media influencers to raise awareness among young drivers about the escalating threat of ghost broking.
