‘Ghost brokers’ targeting young drivers on social media

The Financial Conduct Authority (FCA) has issued a warning to young drivers aged 17 to 25 about the growing threat of 'ghost broking' scams on social media and messaging platforms. New research reveals that almost half (49%) of young drivers have purchased motor insurance through these channels, putting thousands at risk of paying for non-existent cover and driving without car insurance, which is a criminal offence in the UK.

What is a ghost broker?

Ghost brokers are fraudsters who pose as legitimate insurance sellers, often on social media platforms, luring in victims with the promise of cheap insurance premiums. The policies they sell are either completely fake, rendered invalid because the broker falsified details to artificially lower the price, or they cancel the policy shortly after the driver has handed over money.

The scale of the problem is growing rapidly. The Insurance Fraud Bureau reported a 52% increase in ghost broking activity between 2022 and 2024, while the insurer Aviva has seen a 22% surge in cases since 2023.

Why are young drivers particularly at risk?

Cost-of-living pressures mean that 1 in 7 (15%) young drivers aged 17 to 25 find it difficult to fit insurance costs into their monthly budget. As such, fraudsters are capitalising on this vulnerability, alongside a general willingness among young people to transact online. Almost half (45%) of 1,000 young drivers surveyed said they generally trust products or services purchased through social media.

Furthermore, 4 in 10 (39%) young drivers admit they are unconfident in their ability to spot the signs of a fake insurance policy.

The consequences of buying fake insurance

The repercussions of falling victim to a ghost broker extend far beyond the initial financial loss. Victims are left unknowingly driving without valid insurance, which is a criminal offence in the UK. If caught, motorists face severe penalties, including fixed fines, penalty points on their licence, disqualification from driving, and even having their vehicle seized by the police. This week, the BBC reported that a 21 year old driver was left with a criminal conviction for driving without insurance after being conned by a ghost broker.

How to protect yourself from ghost brokers

To avoid becoming a victim of a ghost broker, the FCA urges young drivers to be vigilant and follow these key safety checks:

• Be extremely wary of offers that sound too good to be true.
• Avoid deals that are only available through social media and messaging platforms.
• Genuine sellers should have a legitimate website, a working phone number, and a verifiable address.
• Always use the FCA Firm Checker to confirm the firm is officially authorised.
• Check that the firm’s contact details match those listed on the Firm Checker to make sure you are dealing with the genuine firm.

Graeme Reynolds, director of insurance at the FCA, highlighted the dangers facing motorists: "Tight budgets make cheap offers tempting and scammers take advantage of that".

He added: "Don’t get ghosted by a policy that doesn’t exist. Check the FCA Firm Checker before you buy, because driving uninsured could cost you far more than any premium".