Reports of people being duped by fake motor insurance deals sold by Ghost Brokers on social media rose 6% last year and a further increase is expected as financial strain increases, warns the Insurance Fraud Bureau (IFB).

The news comes as exclusive YouGov findings reveal one in five 18-24 year olds are now using social media to search for car insurance deals – which is a prime hunting ground for Ghost Brokers. Furthermore, new insights by the IFB show that TikTok and SnapChat are now amongst the most popular sites for the con to take place.

The General Insurance Fraud Committee (GIFC) believes more people will be tempted by deals that are too good to be true and has launched a campaign in partnership with insurers and police to encourage the public to be savvy to bogus deals.

On any given year the IFB can uncover up to 50,000 fraudulent motor insurance policies with thousands of these being linked to Ghost Broking activity. Falling for a fake motor insurance deal not only leaves victims out of pocket, but they risk serious consequences by having their vehicle seized by the police for driving uninsured.

Think it can’t happen to you?
Manpreet, a student at Birmingham City University, reported to CheatLine after falling victim to a Ghost Broker which left her £2,000 out of pocket and her identity stolen. Having struggled to find an affordable insurance quote online, she turned to TikTok where she found an ‘insurance broker’ who claimed to have helped lots of people find a great deal.

Despite Manpreet asking all the right questions, the Ghost Broker lured her into his web of lies. She describes him as being very manipulative, telling her “you need to trust me” and “I’ve got you sorted”, the red flags obvious when she looks back on their exchanges. When she questioned how he was able to secure such a cheap deal, he simply said “It’s just what we do”. After spending two hours on the phone and watching him seemingly enter her details on the system, she was convinced. Little did she know her world was about to come crashing down.

Manpreet shared this piece of advice: "My message to everyone around my age group would be if [on social media] a broker has posted insurance advice or they've shown pictures of what they call evidence to help other people and it looks too good to be true, then I would not go for it... they would probably end up lying on your policy."

Want to watch Manpreet’s full story?

Ursula Jallow, IFB Director said:
“More and more young people are turning to social media to find deals and save money. These deals are often not what they say they are and leave victims seriously out of pocket and at risk of getting themselves into trouble with the police for driving without insurance.

“We're helping young drivers to recognise the warning signs of a Ghost Broking scam as part of this national campaign. If anyone thinks they've seen a fake insurance deal they can report it anonymously to our confidential CheatLine."

Detective Chief Inspector Tom Hill, from the City of London Police’s Insurance Fraud Enforcement Department (IFED), said:
“Factors such as the cost-of-living and low paid part-time jobs unfortunately make students and young adults the perfect target for Ghost Brokers. As they can often use social media to advertise enticing offers, these criminals can end up having access to a wide pool of victims.

“It truly does pay to make sure you’re getting the real deal when buying an insurance policy. A bogus car insurance policy could mean facing a fine, points on your licence, your car being seized and crushed, not to mention covering the cost of a new, valid policy.”

Mark Allen, ABI Head of Fraud and Financial Crime, said:
“As individuals and households maintain tight budgets to cope with the cost of living, no one wants to fall foul to fraudsters. Beware of offers advertised on social media and contact insurance companies directly or check the Financial Services Register to verify broker details. The golden rule is to never act in haste – if a deal seems too good to be true, then it probably is.”

What is Ghost Broking?
‘Ghost Broking’ is the name given to a tactic used by fraudsters who pose as genuine insurance brokers and sell fraudulent insurance policies. They typically lure in their victims on social media, on channels such as Facebook, Instagram, TikTok and Snapchat where they offer ‘discounted’ but fraudulent insurance policies. 

Despite its prevalence, a recent YouGov survey revealed only one in ten people are familiar with Ghost Broking cons, which means millions of vulnerable people are susceptible.

By targeting younger people, who are typically more expensive to insure, with unrealistically cheap car insurance deals, Ghost Brokers often leave their customers out of pocket and unaware that their policy is fake until they try to claim, or are stopped by the police. If the police stop a driver with fake insurance, they face the same consequences as any other uninsured driver. This includes their car being seized, possibly crushed, and facing court where they could get a driving ban and an unlimited fine. A criminal conviction can also impact job prospects.

Advice to stay safe
Follow these simple steps on how to spot the signs of Ghost Broking and protect yourself against it.

Know the signs:

• The price is much better than you can find anywhere else.
• The seller only wants to communicate via social media or a messaging app (e.g. Whatsapp or Snapchat).
• The advert looks unprofessional and is poorly spelt.
• The seller is vague about how they're getting you such a good price.
• The seller doesn't have a legitimate website, UK landline number or address.
• The seller offers insurance at an upfront cost, despite insurance being meant to be priced based on the risk of the individual.

Do your checks:

• If buying through a broker, check they're registered with British Insurance Brokers' Association (BIBA).
• If buying directly through an insurer, check they're a member of Motor Insurers' Bureau (MIB).
• Whether broker or insurer, check they're registered with the Financial Conduct Authority (FCA). If they're not, it's best to avoid them.

And remember, to report any Ghost Broking activity to CheatLine online or by calling 0800 422 0421. Reporting fraud helps us shut down their operations and keep others from falling for their nefarious scams.