Young drivers have been warned over a growing wave of "ghost broker" scams, with fraudsters selling fake car insurance policies through social media and messaging apps.
Research from the UK regulator, Financial Conduct Authority, has suggested that almost half of drivers aged between 17 and 25 have bought insurance through social media platforms, despite the increasing risk of fraud.
The scams involve criminals posing as legitimate insurance brokers and offering policies at heavily discounted prices.
In many cases, the insurance is either fake, cancelled shortly after purchase, or invalid because false details have been used to lower the premium.
Victims often only discover the policy is worthless after being stopped by police or attempting to make a claim.
Drivers caught without valid insurance could face fines, penalty points, driving bans and even criminal convictions.
Car insurance experts at Quotezone have now issued urgent advice to help motorists avoid being caught out.
The warning comes after FCA research found that 39 per cent of young drivers are not confident they could spot the signs of a fake insurance policy.
The regulator also found 45 per cent of young people generally trust products or services bought through social media.
Experts warned that rising insurance costs and cost-of-living pressures are making younger motorists more vulnerable to scams, promising cheap deals.
Greg Wilson, Founder and CEO of Quotezone.co.uk, said ghost brokers are becoming increasingly sophisticated in the way they target consumers.
The FCA has warned drivers of the dangers of purchasing car insurance through social media
| PA/XHe said: "Ghost brokers use a variety of methods to appear legitimate and gain the trust of unsuspecting consumers, including professional-looking websites, sophisticated advertising strategies, and even seemingly 'official' documents."
Mr Wilson warned that many fraudsters pretend to represent trusted insurers to make the scam appear genuine.
He added: "They may also present themselves as agents of reputable insurance companies, adding an extra layer of credibility to what is ultimately fraudulent activity.
"By offering significantly lower premiums, they attract budget-conscious shoppers, especially young drivers, who may not be aware of the risks associated with these 'too good to be true' deals."
The FCA is now urging motorists to be cautious of insurance offers found exclusively through social media or messaging platforms.
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Young drivers are more at risk of ghost broking scams than any other age group
| GETTYDrivers have also been encouraged to use the FCA Firm Checker tool to make sure a company is authorised before handing over money or personal details.
Graeme Reynolds, director of insurance at the FCA, warned that tight budgets make cheap offers tempting, and scammers take advantage of that.
He added: "Don't get ghosted by a policy that doesn't exist. Check before you buy, because driving uninsured could cost you far more than any premium."
In response to the data, Quotezone has shared a number of safety tips to help consumers avoid ghost brokers, including checking whether a broker is registered with the FCA, comparing quotes from reputable insurers, and avoiding cash payments.
Drivers should contact insurers directly if they are unsure whether a policy is genuine and carefully inspect policy documents for signs of tampering.
Drivers have been targeted by ghost brokers through online and social media channels | GETTYExperts also warned motorists to be suspicious of unsolicited offers sent through texts, social media messages or emails advertising unusually cheap insurance.
Mr Wilson explained that as these scams increase, consumers must stay informed and exercise caution when purchasing insurance.
He added: "Always take care to verify the broker's credentials, be wary of unusually low prices, and if in doubt, contact the insurer directly."
The Insurance Fraud Bureau previously reported a sharp increase in ghost-broking activity in recent years, as fraudsters increasingly target younger, less experienced drivers online.
Sam Wilson, Expert at Compare the Market, warned that falling victim to a ghost broker can leave people seriously out of pocket and, in some cases, unknowingly driving without valid insurance.