A warning has been issued to motorists about 'ghost brokers' selling bogus insurance policies through social media and messaging platforms. Motorists aged 17 to 25 are being urged to be vigilant, as a survey indicates around half (49%) of young drivers have bought insurance through social media or messaging apps.
Survey Highlights Risks
Around four in 10 (39%) young drivers surveyed said they would not feel confident in spotting the signs of a fake policy, according to the Financial Conduct Authority (FCA). Ghost brokers are not legitimate brokers but criminals attempting to scam people by selling bogus insurance policies on social media and messaging platforms. They often target young people and students who may have less experience buying insurance.
Young motorists, who typically pay higher premiums, may be tempted by offers that appear cheap. However, the policies sold by ghost brokers are either entirely fake or contain falsified details to artificially reduce the price. Criminals may also cancel the policy shortly after purchase, leaving the buyer uninsured and at risk of prosecution, fines, and even having their car seized.
Trust in Social Media
More than two-fifths (45%) of young people surveyed said they generally trust products or services bought through social media. One in seven (15%) said they find it difficult to fit insurance into their monthly budget. The FCA is urging young drivers to be wary of offers that sound too good to be true and to avoid deals available only through social media and messaging platforms.
Genuine sellers should have a legitimate website, phone number, and address. The FCA also suggests checking the firm's contact details against the FCA's Firm Checker tool on its website to ensure they are dealing with a genuine firm.
Official Comments
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.'
The survey was conducted by Kantar among 1,000 drivers aged 17 to 25 across the UK in April and May. 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. That's why tackling fraud remains a top priority for our industry. Motorists can stay vigilant by avoiding offers solely advertised on social media, contacting insurers directly to verify legitimacy, and using the FCA Firm Checker to check a broker's details. The golden rule is to never act in haste – if a deal seems too good to be true, then it probably is.'
