A ghost broker is a fraudster who poses as a legitimate insurance broker to sell forged or invalid car insurance policies to unsuspecting drivers, who are lured by very cheap, too-good-to-be-true premiums.

Young drivers aged 17 to 24, especially men, are most likely to fall victim to ghost brokers, according to research by Action Fraud.

This age group is less experienced at buying insurance and is more likely to have tighter budgets. They are also more likely to use social media, which scammers like to advertise on

People in non-English speaking communities are also at greater risk of being targeted.

The consequences of buying fake insurance can be the same as driving uninsured. These include: a fine, penalty points, disqualification from driving, a criminal record, and the risk of having the car seized by the police.

The minimum penalties for driving uninsured are a fixed penalty fine of £300 and six penalty points – which for newly qualified drivers could mean they lose their licence.

Fleur Lewis, head of fraud detection and prevention at GoCompare Car Insurance, said: “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.

“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.”

How do ghost brokers operate?

In return for the promise of low premiums, victims are typically asked for an upfront cash payment.

Ghost brokers tend to defraud victims in one of three ways. They may forge insurance documents, or they may manipulate the customer’s details to lower the premium (for example by faking no claims discount letters or by giving a lower-risk address).

They may use the genuine identity of an unauthorised third party to set a policy up, and in some cases cancel the policy soon after to pocket the refund on top of the victim’s fee.

Ghost broker warning signs

• Be wary of unsolicited calls from insurance brokers – authorised firms are unlikely to contact you out of the blue;
• Be cautious of being approached by brokers in unconventional ways such as on social media, by brokers selling car insurance in pubs or through adverts in newsagents or universities;
• Be wary of brokers who only provide scant contact details (e.g. DM only on social media or mobile phone), check to see if they have an office address and landline telephone;
• Check the broker firm is on the Financial Services Register and authorised by the Financial Conduct Authority or the British Brokers’ Association;
• If you suspect that you have been contacted by a ghost broker, or have fallen victim to an insurance fraud, you can report it to Action Fraud at police.uk / 0300 123 2040 or to the Insurance Fraud Bureau’s Cheatline at insurancefraudbureau.org/cheatline / 0800 422 0421