Ghost broking – buyer beware!

Ghost brokers are fraudsters who set out to sell cheap insurance deals where the policies either don’t exist at all or aren’t valid. Either way, the consumer will not be provided with any form of legal insurance.

Who do they target?

Generally those who will struggle financially to obtain insurance. They target the young driver market who may not have a good understanding of how the insurance market works or who are given quotes for much higher insurance premiums and are looking for that cheap deal. At the moment with people on furlough, returning to work or looking for work, cheap deals seem attractive.

Where do they target?

Social media advertising is their main platform. The IFB have seen a percentage rise in ghost broker claims in recent years, and say ‘one in three 18-24 year olds’ state they have seen the scam advertised on social media.


Ghost brokers will pretend to be a genuine broker acting as the negotiator between the insurer and customer. They use various techniques to grab the attention of the consumer and sell the fake policy.

Ghost brokers will spoof genuine insurance companies online, directing you to their fake website, where the consumer thinks that they are dealing with a genuine company.

Forgery and falsification - Polices are generally bought from legitimate insurance companies using the consumer’s details before being amended (for example changing the driver’s occupation or age to reduce the policy price) and sold on to the non suspecting customers. Alternatively, the ghost broker may generate entirely fake policy documents by imitating legitimate policy documents and selling them on.

Cancellation – sometimes the fraudsters will set up the policy using all the correct details provided, send out the relevant policy documents and lead the victim to believe they are now fully insured, only for them to cancel the policy, pocket the refund and leave the victim driving around uninsured and unaware.

What are the consequences?

Driving with no valid insurance can have serious repercussions and the non-existent policy or cancelled policy will leave a victim without any cover at all. Police will stop cars where ANPR detects no valid insurance. They will have no protection if they are involved in a crash and their car may be seized and impounded by the police, with points added to the victim’s driving licence. Obtaining insurance after a conviction for driving without insurance can prove very difficult and expensive.

If the policy has been taken out legitimately, but with false details, the insurance company may void (cancel) the policy from the start once it becomes aware of the false details. This can leave the victim of the ghost broker in the same situation as with an entirely fake policy.

How to spot a ghost broker

Consumers need to take care:

1 They are encouraged to buy insurance from a reputable source:

  • Check the legitimacy of the broker with the BIBA and FCA if buying insurance through a broker.
  • Check they are a member of the MIB (if buying directly from the insurance company).
  • Do they have a legitimate website, telephone number?
  • Check the web address and email address used very carefully.
  • Get more than one quote – if one is far lower than others, double-check its legitimacy.
  • Check for online reviews of the broker.

Contact the insurer – Ghost brokers will often set up ‘policies’ with well-known insurers, calling them and checking is the best way to see if the policy has in fact been put in place, that the details match yours and whether it’s a valid policy.

Remember, if it seems too good to be true, it probably is.

The IFB are encouraging victims of ghost broking and those who have seen the suspicious adverts to report this to them via Cheatline (08004220421) and get further advice.