Scammers are becoming more sophisticated, and ghost brokers (fraudsters selling fake insurance policies) are targeting lots of young drivers on social media. If you’re unsure about an insurance broker’s legitimacy, take a look at our top tips in this blog for identifying ghost brokers and help protect yourself from getting scammed.
What is a ghost broker?
A ghost broker is a scammer who poses as a legitimate insurance broker to sell fake or invalid car insurance policies. They often target drivers that are young and inexperienced and those looking for cheap deals, especially on social media, messaging apps and online forums.
The Insurance Fraud Bureau describes a ghost broker as: ‘a fraudster who pretends to be a genuine Insurance Broker in order to sell fraudulent car insurance.’
How do ghost brokers provide ‘insurance’?
Ghost brokers operate in a lot of different ways. There are a number of red flags for how ghost brokers provide ‘insurance’ that you can look out for, including:
🚩 Operating on social media or messaging apps
- Ghost brokers often operate on social media as it is a free and easy tool to reach large audiences.
- Legitimate insurers will never arrange cover over social media, or messaging apps like WhatsApp.
🚩 Online portals
- Ghost brokers have created websites and online portals that create fake insurance certificates.
- The websites, portals and certificates can appear real but provide no legal coverage.
🚩 Forged documents for fake policies
- They create fake insurance certificates using your details, claiming a valid insurance policy.
- These can look very real, but will provide no legal coverage.
🚩 Genuine policies with fake details
- They may take out a real policy using fake information.
- This will lower the premium but make the insurance policy invalid.
🚩 Genuine policies cancelled
- Some ghost brokers will take out a valid insurance policy, but cancel the policy later without the customer knowing.
- They will take the customers money, and keep the refund for themselves.
What can happen if you fall victim to an insurance scam or ghost broker?
Falling victim to a ghost broker can have serious consequences, including:
❌ Driving without valid insurance
- Fake policies mean you’re technically uninsured.
- This can lead to fines, penalty points, or even disqualification from driving.
🚓 Legal issues
- Driving without a valid car insurance policy is against the law.
- This can result in your car being seized and, in some cases, prosecution.
💸 Financial loss
- You’ll lose any money paid to the scammer.
- You’ll still have to ensure you have a valid car insurance policy and pay for this.
⚠️ No cover in an accident
- If you’re in a crash, you’ll have to cover all costs yourself as you’ll be uninsured.
- This could include any damage to your car, person and any third-party claims.
🚨Personal data theft
- Scammers might use the personal data you have provided for identity fraud, leading to further financial risks.
- This could include your name, address and driving licence details.
How can you protect yourself from insurance scams and ghost brokers?
🔎 Check the profile
- Look for official accounts with legitimate looking websites linked in the bio.
- Be wary of profiles with limited posts, few followers or contact only over Whatsapp or direct messages.
🤔 Too good to be true
- If it sounds too good to be true, it probably is!
- Unrealistically cheap insurance quotes are a red flag. If the price is significantly lower than reputable insurers, it’s more than likely a scam.
✅ Verify their legitimacy
- Genuine insurers are registered with the Financial Conduct Authority (FCA) or British Insurance Brokers’ Association (BIBA). Check their details online before engaging.
- Ghost brokers may refuse to provide official registration details which is another red flag.
📲 Beware of unusual contact methods
- If an insurance deal is offered exclusively via Whatsapp, Facebook Messenger, or Instagram direct messages, proceed with caution.
- Legitimate insurance providers will use their official websites and approved customer service channels.
⌛Pressure tactics
- Scammers often create urgency with their products, offering ‘limited time offers’ to pressure you into buying.
- Don’t rush into a deal without verifying the provider first.
What our experts have to say
“No insurance company will arrange cover and payment through social media and messaging apps. Ghost brokers are known to send online portals via email and show fake reviews from their ‘customers’. These may seem legitimate but are in fact fabricated and used to lure in their victims.
Do not be tempted by cheap deals and risk the points on your licence, fines and your vehicle being impounded. Even though you think you could be saving money, in reality it will end up costing you much more in the long run.
If you do find yourself a victim of ghost brokering, please come forward and report your case to the authorities and help prevent future victims.”
Ryan Anderson – Fraud Analyst, Dayinsure
What to do if you spot a car insurance scam or ghost broker
If you suspect you’ve been scammed or you’ve found a suspicious car insurance provider selling over social media, report them to Action Fraud and the FCA to help prevent others from becoming a victim of a scam. You should also make sure you have arranged a valid car insurance policy and inform your bank of any fraudulent payments.
You can also contact our fraud team at Dayinsure if you believe a ghost broker is pretending to be Dayinsure. Contact us on support@dayinsure.com with the following information:
- Which website or social media account you suspect as being fraudulent.
- Any names/phone numbers/email addresses you have for the ‘company’.
- Screenshots of any documents or messages relating to the ghost broker/fake policy.
- Payment details – ghost brokers will ask for payment by bank transfer, PayPal or Stripe.
All evidence will be treated confidentially, your help can stop these fraudsters and could help you get your money back.
