Young motorists are being warned about the dangers of “ghost broking” scams, with new research suggesting nearly half of drivers aged 17 to 25 have purchased insurance through social media or messaging apps.
The Financial Conduct Authority (FCA) said that 39% of those surveyed would not feel confident spotting signs of a fake policy. Ghost brokers are criminals who sell bogus policies, often targeting young people and students who may have less experience buying insurance.
These scams involve policies that are either entirely fake or have falsified details to artificially reduce the price, and criminals may cancel the policy shortly after purchase. This leaves buyers unknowingly uninsured, facing prosecution, fines and even having their car seized.
The FCA advises caution with deals that seem too good to be true, and recommends checking the firm’s contact details against the FCA Firm Checker tool on its website. Genuine sellers should have a legitimate website, phone number and address.
Graeme Reynolds, director of insurance at the FCA, said: “Tight budgets make cheap offers tempting – and scammers take advantage of that. Don’t get ghosted by a policy that doesn’t exist. Check the FCA Firm Checker before you buy, because driving uninsured could cost you far more than any premium.” Chris Bose, director of general insurance at the Association of British Insurers, added: “Ghost broking leaves victims uninsured, out of pocket and potentially facing serious legal and financial consequences.” The survey, conducted by Kantar among 1,000 drivers aged 17 to 25 in April and May, also found that 45% generally trust products bought via social media, while 15% struggle to fit insurance into their monthly budget.
