Beware of ‘ghost brokers’ on social media, warns insurance comparison site

Young drivers are being warned to avoid so-called ‘ghost brokers’ on social media who offer car insurance at too-good-to-be-true prices.

Insurance comparison site GoCompare says motorists should ‘trust their gut instincts’ to avoid getting struck by fraudsters posing as a legitimate insurance broker.

Research by Action Fraud last year found young men are the most likely to fall victim to ghost brokers, which GoCompare says is likely because they’re not only inexperienced at buying insurance, but also face the highest premiums. The research also found non-English speaking communities at high risk.

It’s said there are three key tactics used by these brokers, who typically ask for cash up front. They often forge documents with no insurance set-up at all, create fake documents to artificially lower the price, such as using a lower-risk address, or genuinely set-up insurance before cancelling it shortly after, pocketing the driver’s fee and the insurance company’s refund.

Drivers who are the victim of these scams are then unwittingly driving without insurance and could face a fine, penalty points, a driving disqualification, a criminal record, and the risk of having their car seized.

Fleur Lewis, head of fraud detection and prevention at GoCompare Car Insurance, said: “Younger, less experienced drivers pay more to insure their cars, which makes them particularly susceptible to adverts for heavily discounted insurance.

“Ghost brokers often operate on social media, especially Facebook and Instagram, where they often use imagery and logos of established insurers to enhance their believability.

“So, we’re warning people to be highly suspicious of cheap insurance advertised on social media or websites where the deal they are being offered looks too good to be true. Drivers can save money by shopping around for cover, but if the insurance offered is significantly less than you could get on a comparison website – be suspicious.”

Ben Fletcher, director of the Insurance Fraud Bureau, added: “Ghost broking is a serious issue, which shows little sign of slowing down. A third of all our investigations are focused on bringing ghost brokers to justice.

“When buying car insurance, we urge the public to make sure they’ve done the right checks first, so they are confident they are taking out cover from a trusted source. Consumers can also help in the fight against fraud by reporting any suspicious activity to IFB’s Cheatline.”