The cost of car insurance, especially in big UK cities, just keeps rising. Which means there’s a temptation to look online for super cheap car cover deals, often via Facebook, Insta, TikTok or other platforms. But often these amazing deals are scams with fake policy docs and no underwriter behind the bogus policy, here’s the word from Tempcover;
Social media car insurance scams have doubled in 2024, leaving victims £185,369 out of pocket in just one year, according to Action Fraud data analysed by Tempcover, the temporary car insurance service.
Action Fraud received 179 reports of social media car insurance scams in 2024, but the actual number of victims is likely far greater. Many people who have been defrauded don’t realise that they have been tricked, and drive their vehicle unaware that they aren’t covered. Losses increased from £77,351 in 2023 alone, when 90 people alerted the police.
A ghost broker is an individual or company that sells fake or invalid insurance policies, often to unsuspecting customers. These brokers typically offer cheaper premiums or fraudulent coverage, leaving the buyer without legitimate insurance when they need it most.
The average victim of Ghost Broker scams (where fraudsters sell fake or invalid insurance policies) last year was aged 33 and lost £1,036, contributing to a total loss of £185,369, with many signing up for ongoing monthly payments.
Graph: Financial losses to Ghost Broker scams on social media
Source: Tempcover/Action Fraud
‘Ghost broker’ scams have risen in recent years, with fraudsters typically targeting victims on social media by selling fake insurance policies at incredibly low prices and then disappearing.
Ghost brokers employ various deceptive tactics, often leaving unsuspecting customers completely unprotected. A common tactic involves the creation of entirely fake insurance documents, including certificates and policies that mimic those of legitimate insurers.
Getting caught with fake car insurance can have devastating consequences. If stopped by the police, a person could face prosecution for driving without valid insurance, resulting in fines up to £300 and six penalty points. The car could be seized, impounded, or even crushed. In the event of an accident, the victim will be personally liable for any injuries or damage caused, and will have to pay for repairs out of pocket, compounding the loss from the fraudulent policy.
New research from Tempcover reveals one in six people (15%) say they would consider buying car insurance via social media, suggesting there is a critical need for greater education and awareness. This is further highlighted by one in ten consumers (10%) having attempted to purchase a policy this way, with more than a tenth (11%) discovering it was a scam.
Temporary car insurance experts at Tempcover are advising drivers to be extremely cautious when seeing car insurance offers on social media, and strongly recommend verifying the legitimacy of any provider.
Jake Lambert, temporary car insurance expert at Tempcover, says: “Falling for a ghost broker scam can have devastating consequences. Victims might unknowingly be driving without valid insurance, facing fines, penalty points, or even be at risk of having their vehicle impounded. Worse still, if an accident happens, they could be left with a huge financial loss, paying for damages out of pocket, including vehicle repairs, legal fees, or even compensation for injuries.
“By staying informed and taking precautions, you can keep yourself covered and avoid unnecessary risk. Your peace of mind is worth it – if something doesn’t feel right, take a step back.”
SPOT THE RED FLAGS
- Prices that seem too good to be true, often with high-pressure sales tactics
- Policies filled with errors or missing details
- Brokers mainly operating through social media and messaging apps
HOW TO PROTECT YOURSELF:
- Check credentials on the Financial Conduct Authority (FCA) website – https://register.fca.org.uk/s/
- Buy directly from a trusted broker’s official website or app
- Verify your policy by calling the insurer directly
- Trust your instincts – if something feels off, walk away
IF YOU THINK YOU’VE BEEN SCAMMED:
- Report it to Action Fraud
- Contact your bank about the payment
- Arrange a valid insurance policy with a legitimate trusted insurer immediately
Jake Lambert adds: “Tackling ghost brokers requires an industry-wide collaboration. That’s why we work closely with the FCA to report regulatory misuse, and in serious cases, engage directly with the police and Action Fraud. We’ve also built formal partnerships with leading social media platforms to swiftly remove fraudulent accounts, ads and profile imitations looking to deceive our customers, helping to better protect them from fraudsters.”
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