Drivers warned to avoid bogus car insurance deals on social media, as over 21,000 fraudulent policies are identified

The Insurance Fraud Bureau (IFB) is warning drivers to watch out for fraudsters selling fake car insurance on social media, as it reveals over 21,000 fraudulent motor insurance policies were reported to it by insurers in the past 12 months which could be linked to the scam.

‘Ghost Broking’ is a growing scam, which involves fraudsters pretending to be Brokers in order to sell unrealistically cheap and completely fake policies.

The bogus deals are often advertised via Facebook and Instagram with victims ranging from young and new drivers, to communities less familiar with UK insurance laws. The scam not only leaves victims out of pocket, but facing serious penalties for driving without insurance.

The IFB - which acts as a central intelligence hub for insurers to tackle organised fraud – received reports of 21,169 fraudulent motor insurance policies in the past 12 months which could be linked to ‘Ghost Broking’ – equating to nearly 60 bogus policies being generated each day.

With 45 police forces executing Op Drive Insured this week in a national crackdown on uninsured motorists, the IFB is urging drivers to watch out for ‘Ghost Broking’ scams or face the consequences for driving without insurance.

Stephen Dalton, Head of Intelligence and Investigations at the IFB, said:

“Clearly, fraudsters are attempting to take out a high volume of fraudulent car insurance policies so they can profit at the expense of insurers and honest consumers. This is a serious problem and I believe the figures we’ve identified only begin to scratch the surface.  

“With police forces upping their efforts to crackdown on uninsured driving, it’s essential that consumers aren’t tempted by ‘too good to be true’ car insurance deals on social media. They’re entirely fake and will result in the driver’s vehicle being seized for no insurance.

“If anyone has seen evidence of a suspicious motor insurance deal, it should be reported to our confidential CheatLine on 0800 422 0421 or at www.insurancefraudbureau.org.”

Ghost Brokers’ operate by tempting victims with unrealistically cheap prices up front, despite the fact insurance is meant to be priced based on the risk of the individual. Once they’ve caught their victim’s attention, they’ll encourage contact through popular end-to-end encrypted messaging software such as WhatsApp to keep illegal dealings in private.

The IFB has seen its percentage of investigations into ‘Ghost Broking’ double in recent years and believes tens of thousands of motorists could unwittingly be driving with fraudulent cover, who will face serious consequences when caught out by the police.

So far this year over 100,000 uninsured drivers have had their vehicle seized.

Drivers without valid insurance also face a £300 fixed penalty notice and six licence points. If the case is taken to court, they could also receive an unlimited fine and/or a driving ban.

Detective Chief Inspector Edelle Michaels, Head of the City of London Police’s Insurance Fraud Enforcement Department (IFED), said:

“The Op Drive Insured campaign has been an important reminder to the public of the consequences of driving uninsured. Whilst some drivers may knowingly be uninsured, there are many who do not realise that they are driving without valid insurance, having purchased their policy through a ‘Ghost Broker’.

“IFED has investigated a number of cases in 2021 which have exposed the immoral tactics used by these criminals to catch out their victims, including two young men who took advantage of their peers being charged high insurance premiums, and an individual who pretended to help those looking to insure their first vehicle in the UK.

“It really is crucial to check that the person you are speaking with is the real deal. It is quick and easy to find out if a broker is authoriser, simply check the FCA or BIBA website – it could end up saving you a lot of money and help you to avoid issues in the long run.”

Avoiding fake car insurance deals

• Consumers are urged to avoid deals on social media or messaging apps and to only purchase car insurance through reputable sellers.
• If buying through an Insurance Broker they should check the seller is registered with the British Insurance Brokers’ Association (BIBA).
• If buying directly through an insurer they should appear as a registered member of the Motor Insurers’ Bureau (MIB).
• Checks can also be made to see Insurance Advisors are registered with the Financial Conduct Authority (FCA).
• Anyone with evidence of an insurance scam should report it to the police and the IFB’s Cheatline which is quick, easy and confidential to use. The CheatLine can be contacted online or via a phoneline (powered by Crimestoppers) on 0800 422 0421.
• Insurance fraud reports can also be submitted to Action Fraud.