Drivers have been warned about a sharp rise in fake car insurance deals being sold online, which could see millions slapped with hefty penalties and a possible driving ban.
The fraudulent practice involving so-called "ghost brokers" has spiked by over 50 per cent in the past two years and has been found to specifically target young drivers.
New figures released by the Insurance Fraud Bureau (IFB) today found that the scams have grown and have been increasingly advertised on popular social media platforms including Facebook, Instagram, SnapChat and TikTok.
New drivers, including those insuring their first car and learners who need cover, are most at risk of falling victim to these scams.
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Young drivers are more at risk of encountering ghost brokers
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To combat this growing problem, the Association of British Insurers, City of London Police and the IFB have launched a campaign to raise awareness of ghost broking, in association with the Government's Stop! Think Fraud national campaign.
The initiative aims to help protect young drivers from this devastating issue by highlighting warning signs and encouraging the public to report suspicious activity.
Ghost brokers are fraudsters who pose as legitimate insurance brokers, offering policies that appear to be genuine but are actually invalid.
They exploit the high costs young drivers face, along with their lack of experience in purchasing insurance, by marketing deals that seem irresistible.
A YouGov survey found that nearly one in five (18 per cent) 18-24 year-olds have used social media to search for car insurance.
These criminals typically communicate through private messages and encrypted platforms like WhatsApp to keep their illegal dealings private, the IFB detailed.
They create fraudulent policies using stolen details belonging to people who are cheaper to insure, then sell these on at reduced rates. Sometimes, the "policy" may simply be a photoshopped document with no actual coverage behind it.
In both cases, the victim is left driving without valid insurance. The consequences for victims of ghost broker scams can be severe, both financially and legally. Victims can lose hundreds and in some cases thousands of pounds to these fraudsters.
More seriously, the crime puts motorists at risk of driving without valid insurance, which carries significant legal penalties. Police can seize uninsured vehicles, and drivers face six licence points, a £300 fine, and a court referral.In court, they could receive an unlimited fine and potentially a driving ban.
The IFB confirmed that around 115,000 fraudulent motor insurance policies were detected between 2023-24, with ghost brokers believed responsible for thousands of these cases. Ghost brokers also steal victims' personal information to use in further financial crimes, such as banking fraud.
Ursula Jallow, Director at the IFB, said: "New drivers are caught out by Ghost Brokers because they face higher premiums and have had less experience in purchasing insurance policies for themselves, which unfortunately means they are more likely to be attracted to car insurance deals, that are too good to be true."
"The impact is devastating. We've seen victims lose thousands of pounds, have their identities stolen, their confidence and self-esteem shattered, and in some cases, they have even had their car seized for driving uninsured."
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Ghost broking cases have increased by 50 per cent over the past two years
GETTYFraud Minister Lord Hanson added: "Young people especially need to be aware that the scammers are deliberately targeting them through their social media feeds with attractive and authentic-looking offers which will leave them ripped off and driving uninsured."
