Ghost broking is a growing concern in the motor insurance industry with cases rising by 30% over the last five years, according to exclusive data obtained by Sky News[1]. This increase is largely attributed to the ease with which scammers can set up social media accounts and advertise fake policies[1]. Young drivers are particularly vulnerable, as they often seek to reduce their high insurance costs[1]. This scam can leave drivers without valid insurance, exposing them to significant financial and legal risks. In this blog, we’ll explore what ghost broking is, how it works, and what you can do to protect yourself.

What is Ghost Broking?

Ghost broking involves fraudsters posing as legitimate insurance brokers to sell fake or invalid car insurance policies. These scammers often target individuals looking for cheaper insurance rates, such as young drivers, students, or those with high premiums[1]. The term “ghost” refers to the fact that these brokers are not officially registered or recognized by any regulatory bodies, and the policies they provide essentially “do not exist”.

How Does Ghost Broking Work?

Ghost brokers typically operate in one of three ways:

1. Forgery: Scammers buy real insurance documents and alter the names and dates to those of the person they’re scamming. They sell these forged policies to multiple people, collecting premiums without providing actual insurance[1].
2. Falsification: Fraudsters buy real policies but falsify personal information to lower the cost. For example, they might report a young driver as being older or change the postcode to one with lower crime rates. When the insurance company discovers the falsified information, they cancel the policy, leaving the victim without coverage[1].
3. Cancellation: Scammers buy a real policy with accurate driver information but cancel it without the customer’s knowledge, collecting the refund. The victim only discovers the scam when they try to make a claim[1].

Signs of a Ghost Broking Scam

To protect yourself from ghost broking, be on the lookout for these red flags:

• Unbelievably Low Prices: If an insurance deal seems too good to be true, it probably is. Be wary of significantly lower premiums than the market average.
  
• Social Media Ads: Ghost brokers often advertise on social media platforms, offering attractive deals. Always verify the legitimacy of such offers.
  
• Lack of Official Contact Information: Legitimate brokers will have a registered business address and contact number. Be cautious if the broker only provides a mobile number or email address.
  
• Pressure to Pay Quickly: Scammers may pressure you to make a quick decision and pay via bank transfer or other non-traceable methods.
  
• No FCA Registration: Check if the broker is registered with the Financial Conduct Authority (FCA). You can verify this on the FCA’s official website[2].

How to Protect Yourself

Here are some steps you can take to avoid falling victim to ghost broking:

• Research the Broker: Look up the broker’s reviews and ratings on sites like Trustpilot. Check for any press coverage or customer feedback[2].
  
• Verify the Policy: Contact the insurance company directly to confirm the policy’s validity. Ensure that the policy number and details match what the broker provided. You can also regularly check the status of your insurance through the Motor Insurance Bureau.
  
• Report Suspicious Activity: If you suspect you’ve been targeted by a ghost broker, report it to the police and the FCA. This helps prevent others from falling victim to the same scam.

Ghost broking is a serious issue that can leave drivers without valid insurance and facing significant financial and legal consequences. By staying vigilant and knowing what to look out for, you can protect yourself from these scams. Always verify the legitimacy of any insurance offer and report any suspicious activity to the authorities.

Stay safe and drive insured!

[1] ‘Ghost broking’: Reports of scammers selling fake car insurance rise by …

[2] Ghost broker scam: Police warn thousands of motorists may … – Sky News