With the two biggest shopping events of the year just around the corner, Black Friday and Cyber Monday shoppers are warned to stay alert to fake car insurance deals offered by Ghost Brokers.

These increasingly clever fraudsters prey on unsuspecting victims looking for cheap car insurance deals all year round. However, they also take advantage of legitimate time sensitive sale tactics so Black Friday is the perfect opportunity to lure more unsuspecting victims.

And buying a Black Friday deal from a Ghost Broker could leave drivers seriously out of pocket. As well as the money handed over to the fraudster, being caught driving uninsured results in fines, points on your licence and can impact all aspects of a duped customer’s life.

‘Ghost Brokers’ are fraudsters that pose as genuine insurance brokers and are known to offer illegal broker services in online ads and social media channels such as Facebook, Instagram and Snapchat. By targeting younger people and vulnerable communities with unrealistically cheap car insurance deals, customers are often left out of pocket as the policy they buy from these brokers is fake and they run the risk of being caught driving without valid insurance.

IFB is a not-for-profit organisation that acts as a central intelligence hub, using industry data to work with UK police to detect and disrupt organised criminal groups from committing insurance fraud.

Jon Radford, Head of Intelligence, Investigations & Data Services at IFB shared: “It’s easy to get wrapped up in the excitement of sales, but it’s important to do the leg work and check when buying through a Broker that they’re legitimate.

“The cost of falling victim to a ‘Ghost Broker’ is more than just the money you hand over. Being caught driving uninsured will result in fines, points on your licence and if you rely on your car to get to work, it could even cost you your job.”

And the consequences of driving with a fake policy are serious as drivers will be treated as uninsured at the roadside if stopped by police. Yet YouGov survey results (commissioned by IFB 2023) reveal that only 16% of people have heard of the ‘Ghost Broking’ scam, showing just how vulnerable the British public is to this dangerous scam.

Action Fraud, the national fraud and cybercrime reporting centre, received 611 reports of insurance broker fraud from October 2022 to October 2023. The average person lost around £1,288, a rise of 50% since 2019.

Detective Chief Inspector Tom Hill, from the City of London Police’s Insurance Fraud Enforcement Department (IFED), said: “Everybody loves a bargain, but it truly does pay to make sure that you're buying a genuine car insurance policy this Black Friday. A bogus policy could mean facing a fine, points on your license or your car being seized – not to mention covering the cost of a new, valid policy.

"Be wary of cheap deals on social media and via messaging apps. If you’re unsure whether an insurance broker is legitimate, check the British Insurance Brokers’ Association or Financial Conduct Authority website for a list of all authorised brokers.”

With the increase in online sales driven by Black Friday and a number of car insurance deal incentives appearing online, customers are reminded to do some simple checks before making a purchase.

 
Three easy steps to avoid buying a Ghost Broker’s ‘deal’

1. Customers buying through an insurance broker should check they’re registered with the British Insurance Brokers’ Association (BIBA). If buying directly from an insurer make sure they’re a registered member of the Motor Insurers’ Bureau (MIB). Checks can also be made to ensure insurance advisors are registered with the Financial Conduct Authority (FCA).
   
   
2. Check that the seller has a legitimate website, a UK phone number and address and look out for any behaviour that may seem unusual or out of the ordinary.
   
   
3. If an ad doesn’t look right, report it via the social media channel you’re using.  Most platforms have the option to report suspected scams. This ensures that the fraudsters’ messages are taken down sooner and less people fall victim to them. 

If a member of the public believes they have information about or think they have fallen victim to a ‘Ghost Broker’ they can report the suspected insurance fraud via IFB’s CheatLine service. Either through a confidential phone line that is powered by Crimestoppers on 0800 422 0421 or anonymously online on IFB’s website.