Drivers are being warned to be alert for a rise in ‘ghost broking’ scams that largely originate on social media targeting younger motorists.
The average ‘ghost broking’ scam is said to have cost victims thousands of pounds in 2021, with the average victim losing out on £1,950.
Ghost broking often involves forging insurance paperwork, but can commonly involve selling victim ‘real’ policies, but changing some key details, such as their address or claims record – ultimately invalidating the insurance.
These ‘brokers’ typically sell victims a policy at a reduced price which are attractive to younger, new drivers, who face far larger costs for cover.It potentially leaves motorists liable for fraud and at risk of penalties for driving uninsured.
Dangers: Buying cheaper ‘cover’ from a ghost broker could be costly in the long-run (stock image)
Most ghost brokers operate on social media, with the police and insurance industry agreeing that ghost brokers operate most prolifically on Facebook and minibola Instagram, according to Which?
Last year, insurers collectively reported more than 21,000 policies that could be connected to the scam, according to the Insurance Fraud Bureau.
In May, Which?searched on social media platforms for profiles and pages that showed signs of being run by scammers offering ‘cheap car insurance’ on Facebook, Instagram and TikTok.
Of the almost 50 profiles that matched Which?’s search on Instagram, more than half appeared to be offering quotes or cover to UK drivers, but showed no signs of being authorised by the Financial Conduct Authority.
One Instagram profile was also found boasting it could save customers ‘up to 50 per cent’ on their premium – it also offered ‘NCB (no-claims bonus) documents’ and ‘speeding ticket removal’.
It had 45,900 followers – more than the five biggest insurers combined – and claimed to have ‘over six years experience in [its] field’, and has since been taken down by Instagram after being flagged as a scam.
Consumers should conduct background checks with the FCA to avoid scam insurance brokers selling their services on social media
On Facebook, 14 per cent of profiles were dubious, while only four per cent were flagged as suspect on the video streaming platform, TikTok.
Over 500 cases of ghost broking – with losses totalling £1million – were reported to Action Fraud in 2021.
However, this will only be people who make a report to Action Fraud and actually know that they have bought a fraudulent policy, as the true numbers are likely to be much higher.
Some victims will not report being scammed because they are too embarrassed, while others might be aware their quotes have been manipulated, but ghost brokers can be persuasive in downplaying the significance of this.
Some ghost brokers also put real effort into creating a positive word-of-mouth buzz, which helps them seem trustworthy.
Many of these losses were from young drivers, who face the steepest premiums.
Ghost brokers were also found to be heavily targeting non-native English speakers.
Which also found that social media users may also have been affected by the scam without having bought a false policy, through having their address or other details used as part of forged insurance paperwork.
<div class="art-ins mol-factbox money" data-version="2" id="mol-336b2070-f6cd-11ec-9c2b-b1ed59f1e035" website of ghost brokers selling phony car insurance on social media