Insurance scams warning - don’t fall for a “ghost broker”

If you’re renewing an insurance policy soon, watch out for “ghost brokers”. These are scammers who pose as insurance intermediaries but sell policies that either do not exist or are invalid. These types of scams are on the rise.

The fraudsters largely target car insurance customers. With car insurance a legal requirement to drive in the UK, and the cost of insurance having gone up, drivers can be susceptible to the lure of a cheap policy. But being the victim of a ghost broking scam can leave drivers without proper cover and potentially facing serious consequences. 

Brokers can be helpful when taking out an insurance product because they have access to a wide range of providers and so can compare deals. They can also give you specialised advice based on their expertise. But you need to be able to spot scams.

In this article, we’ll share what you need to know to stay safe and protect yourself.

What’s on this page? 

• What are ghost brokers?
• How ghost broker scams work
• Ghost broker scams are on the rise
• Spotting a ghost broker scam
• Consequences of a ghost broker scam
• How to check your insurance broker is legitimate

What are ghost brokers?

The term “ghost broker” refers to someone who sells insurance policies that either don’t exist or are invalid for some reason.

Car insurance customers are most likely to be targeted by ghost brokers, but this scam can affect home insurance customers too.

John Davies, Insurance Fraud Bureau (IFB) intelligence and investigations manager, says ghost brokers target people who are more susceptible to fraud. “This includes those who may be struggling financially, have less understanding of insurance requirements, or are less familiar with online advertising rules. These too-good-to-be-true motor insurance deals are often promoted by ghost brokers on social media, and sometimes through word-of-mouth.” 

Mark Allen, head of fraud and financial crime at the Association of British Insurers (ABI), says that with many households looking to cut costs, no one can afford to fall foul of fraudsters. He says that older people may be more at risk. “In our increasingly digital world, we recognise that older customers and their younger family members may be particularly vulnerable to ghost brokers who advertise fraudulent insurance deals online or across social media.” 

Drivers aged 50 and over might be targeted on Facebook, or online motoring or money-saving forums. Alternatively older drivers might respond to adverts in pubs, bars or newsagents. To target younger drivers, scammers typically use TikTok, SnapChat or Instagram.

• Read more about common types of scams and how to protect yourself.

How ghost broker scams work

Ghost broker scams typically work in one of three different ways. 

1. Lying about your driving history

Here, your broker buys a policy from a legitimate insurance company. But they falsify your driving details to reduce the premium.

For example, let's say you have a history of car insurance claims and you also have six points on your license. If you bought an insurance policy, it would cost more than average.

But a ghost broker would lie about your driving history to make it cheaper. They might also lie about your address, the car you drive, and even your job title, all to bring down the cost – but without telling you.

So even though you would technically have insurance in place, the policy would be fraudulent. 

2. Offering fake policy documents

The second type of ghost broking scam involves the fraudster designing completely fake policy documents that look like they have been issued by a legitimate insurance company. 

In this scenario, there wouldn’t be a policy in place at all, and the driver would be driving around uninsured.

3. They cancel the policy and pocket the refund, but don’t tell you

Finally, ghost brokers might buy a legitimate policy using your real details and send you all the documents. But they then cancel the policy and pocket the refund. Again, this would leave you unknowingly driving uninsured.

Older drivers also need to beware that their details might be used by ghost brokers to set up fraudulent policies for other people.

In addition, more experienced drivers who are cheaper to insure are at increased risk of identity theft, explains Davies at the IFB. “This is because ghost brokers may attempt to use their details on doctored policies, which are fraudulently sold on to people who ordinarily struggle to obtain motor insurance.”

If you start getting insurance documentation in the post for policies you didn’t take out, beware – this is a warning sign that your details may have been compromised.

Ghost broker scams are on the rise

Incidences of ghost broking have risen in recent years – as has the cost of car insurance. 

According to the ABI's Motor Insurance Premium Tracker, the average motor insurance premium was £468 in 2019 and had risen to £612 in 2024 – a 31% rise.

According to the Insurance Fraud Bureau (IFB), reports of people being duped by fake motor insurance deals sold by ghost brokers on social media rose 6% last year, and a further increase is expected as people struggle with the cost of living.

Spotting a ghost broker scam

Drivers of all ages should be aware of signs that an insurance broker might not be genuine. Any of these can be warning signs of a scam:

• The price is much cheaper than you can find anywhere else
• Cover is offered for an upfront flat fee – car insurance is always priced based on the risk of the individual.
• The broker is only contactable on a mobile number, or only wants to communicate via social media or a messaging app such as WhatsApp, Snapchat or Facebook.
• Adverts are unprofessional or poorly spelt.
• The broker doesn’t have a website, UK landline number or contact address.

The consequences of a ghost broker scam

Victims of ghost broking often don’t realise they have been duped until they need to make a claim. It’s at this point they find out their policy is invalid or has been cancelled.

Unfortunately, the law isn't particularly sympathetic to victims of ghost broking – they are treated the same way as someone deliberately breaking the law.

So if the police stop a driver with fake or invalid insurance, the driver could see their car seized and possibly crushed; or they could end up in court where they could get a driving ban and/or a fine. 

Drivers who have had their policies cancelled or voided by insurers – even through no fault of their own, such as if the broker has provided incorrect information – usually struggle to get insurance in the future.

How to check your insurance broker is legitimate 

• The most important step, whether you use a broker or insurer, is to check they're registered with the Financial Conduct Authority (FCA). 
• If you buy directly through an insurer, make sure they’re a member of Motor Insurers' Bureau (MIB). 
• If you’re buying through a broker, you might want to see if they're a member of British Insurance Brokers’ Association (BIBA) – although brokers do not have to be members, so checking their FCA registration is the most important thing.
• If you are suspicious about a policy already in place, you can check the MIB’s Navigate database. This was previously known as the Motor Insurance Database (MID) and is a central record of all vehicles insured in the UK.
• If you realise you have been scammed, the first thing you should do is buy legitimate insurance for your vehicle. You can report any ghost broking activity to IFB’s CheatLine online or by calling 0800 422 0421. You should also report the ghost broker to the police and Action Fraud.