Motoring experts have warned that young drivers need scam awareness lessons after a study found one in 10 have already been caught out by 'ghost broking' insurance scammers.
Rise in Fraud and Uninsured Driving
Insurers Allianz UK claim their research revealed a 25% increase in young drivers involved in fraud and driving uninsured in the past year. They say one in ten (12%) drivers aged 17-25 have already been caught out by ghost broking, where fraudsters pose as legitimate insurance providers, often on social media, to sell policies that are fake, invalid or bought using false information.
However, Allianz's study of more than 1,000 parents and 500 young drivers claims four in five (84%) of parents admit they've never even heard of ghost broking.
New Quiz to Spot Scam Signs
The insurance firm says it is 'stepping up' to help parents educate the next generation of drivers on how to protect themselves by launching an online quiz to spot scam signs. They say they combat around 13,000 mis-presented and purposefully altered policies a year, including those purchased through a ghost broker.
Allianz UK added that the number of fake and misrepresented policies or where ID has been stolen and used without knowledge rose by 33% between 2022 and 2025. They are launching a campaign to help parents keep their children financially safe.
Parental Concerns and Lack of Awareness
The research reveals nearly two-thirds (60%) worry about their child falling victim to car insurance scams and 82% believe young drivers don't have access to enough resources to navigate these risks. Nearly three-quarters of parents (72%) would welcome more guidance on how to talk about this topic with their kids, feeling unequipped to educate their children on the risks (22%).
Almost nine in ten (88%) say they want social media platforms to do more to remove scams and protect users. Allianz UK's research shows nearly one in five young drivers know a friend or family member who has been affected.
Low Awareness of Risks
Almost two-thirds (63%) have seen cheap insurance adverts on social media, with nearly half (47%) saying they are seeing more of them. However, awareness of the risks of driving with fake or invalid insurance amongst young drivers is low. The research concludes just two fifths (39%) are aware that driving with fake or invalid insurance could lead to their vehicle being seized, or that they could be personally liable for accident or injury costs (51%).
A third (32%) admitted to being unaware that, if caught within the first two years of passing their test, they could face a driving ban that requires them to reapply for their licence and retake both tests.
Allianz UK's quiz is inspired by the DVSA hazard perception test and asks users to spot warning signs across social media adverts, emails and WhatsApp messages. It then gives participants a score and practical advice on how to stay safe.
Ben Fletcher, fraud and financial crime director at Allianz UK, said: "Ghost broking is one of the fastest-growing forms of insurance fraud in the UK and young drivers are targeted through social media. Our research shows there is still significant confusion around how these scams operate and how to identify them. Insurance fraud pushes the cost of policies up for honest customers so we continue to take action and demonstrate the value of insurers and the work we do to protect our customers. We know education is just as important as tackling the problem so we hope our call to strengthen the driving test with insurance education will help target young drivers before they hit the road. The consequences can be costly, from losing money paid to a ghost broker, having your car seized and being left with the cost of a claim, so we want to help consumers understand the risks. As the saying goes - if it's too good to be true, it probably is."
Francis Naokes, from Driving School TV, added: "Learner drivers are tested on everything from stopping distances to road signs before getting behind the wheel. But nowhere are they taught how to spot fake insurance policies or avoid ghost brokers that have affected some of my students. The test we've created helps fill that gap by giving new drivers the skills to identify financial hazards before they can become victims."
The five-minute free quiz is available now at https://www.allianz.co.uk/insurance/magazine/car-magazine/ghost-broking.html
Key Ghost Broker Warning Signs
- Prices significantly below market rate
- Pressure to pay by bank transfer rather than card
- Requests for upfront cash payment
- Policies sold through unofficial channels such as WhatsApp or Instagram direct message
- Documents that contain spelling errors, incorrect insurer details, or cannot be verified on the Motor Insurance Database
- Brokers with no FCA registration number
