New Ghost Brokers Are Being Spotted Online Every Day, Says IFB

It’s a growing problem as criminal supply meets demand for cheap car insurance, here’s the word;

New insights from the Insurance Fraud Bureau (IFB) reveal at least one new Ghost Broking network is uncovered every day, with each capable of targeting thousands of victims. To help disrupt this activity and protect the public, an industry campaign has been launched to warn people about the signs of fake car insurance deals.

Ghost Brokers pose as insurance brokers and sell fake cover through unrealistically priced deals. They often target young drivers on social media, as well as those who are new to the UK, leaving countless people out of pocket and driving uninsured.

In the past 12 months, 596 suspected organised Ghost Broking networks were reported to the IFB.[1] These networks can reach thousands of people through social media and community groups, using multiple accounts, targeted posts with up-front discounts, and buyer testimonials to appear credible.

To help protect the public, the IFB has launched a national multilingual campaign called Ghost Broking: See Through the Scam, on behalf of the insurance industry, in partnership with the Association of British Insurers (ABI), Chartered Insurance Institute (CII), City of London Police’s Insurance Fraud Enforcement Department (IFED), FCA and several insurers.

Ursula Jallow, Director at the IFB, said:
“Ghost brokers deceive people with less experience of buying insurance, which includes young and first-time drivers, and people who have recently moved to the UK. Victims are left out of pocket and risk their vehicle being seized for being uninsured. 

“With new Ghost Broking scams emerging daily, awareness has never been more important. The industry has come together to stand against fraud with a national campaign to tackle the issue. For the first time, multilingual information is also being provided to help raise awareness with people who speak English as a second language.

“We urge anyone with evidence of ghost broking to report it to our confidential CheatLine so we can work with insurers and the police to stop these fraudsters.”

The scale and impact of Ghost Broking

The scam warning comes as new insights from the CII suggest that millions of drivers could have experienced Ghost Broking. A survey found that around one in ten adults who purchased motor insurance in the past three years paid an individual for a policy, by card or bank transfer, rather than paying a company. The CII believes this is a risk indicator and therefore a measure of scale, and estimates the one in ten recent buyers grosses up to well over three million UK drivers. Men were more than twice as likely as women to have paid an individual.

Gen Z buyers (aged 18-30) appeared to be particularly exposed to these warning signs, with 24% having paid an individual for motor insurance. They were also more likely to have encountered other red flags of a fraudulent sale:

• 29% had bought, or seriously considered buying, a policy priced much lower than every other quote (against 16% of all buyers).
• 19% had received policy documents as a photo, screenshot or message (against 6%).
• 16% had arranged cover through a personal contact (against 5%).
• 14% through a community recommendation (against 3%).[3]

Matthew Hill, CII Group CEO said:
“Insurance exists to give people confidence and peace of mind, helping them protect what matters and get on with building their lives. ‘Ghost brokers’ are not brokers in any sense of the word: they are fraudsters trading on the reputation of a profession they have no part in, and they undermine that reputation by selling fake cover that leaves people financially exposed and uninsured. We want consumers, particularly young drivers and those new to the UK, to understand the warning signs and take a moment to check that the insurance they are buying is genuine”

Recent figures show that £1.8 billion worth of fraudulent insurance applications, including Ghost Broking scams and other forms of fraud, were detected by the industry last year, according to the ABI.

During the same period, IFED, which has a national remit to investigate insurance fraud across England and Wales, opened 131 criminal investigations into Ghost Broking – more than in any previous year.

Ghost Brokers promote fraudulent deals on social media, tempting young and inexperienced drivers with low prices and promises of guaranteed cover. They then move conversations to private messaging apps to keep their illegal dealings hidden.

Some fraudsters buy policies using stolen details and resell doctored versions, while others provide entirely photoshopped documents. In each case, victims are left without valid cover and risk having their vehicle seized and crushed by police, receiving six penalty points and facing an unlimited fine.

Young and learner drivers are common targets of Ghost Broking. People new to the UK may also be approached through community networks and in their own language.

LONDON BOYS LEAD THE WAY

New IFED figures reveal where Ghost Broking is most common, with Greater London accounting for four in ten cases. Ghost Brokers can target people across the UK through social media, but many also operate in local communities.

T/Detective Chief Inspector Simon Klust, at IFED, said:

“The latest figures from the IFB paint a stark picture of the challenge we are currently facing in IFED. Ghost broking is at high levels, and our officers are working tirelessly to bring offenders to justice. Young drivers and those new to the UK continue to be targeted by criminals seeking to profit from their vulnerability. We urge anyone buying car insurance to carry out checks on the broker they are using and to avoid making decisions under pressure.”

Mark Allen, ABI Head of Fraud and Financial Crime, said:
“Ghost broking is a cruel scam that can leave victims uninsured and facing potentially serious legal and costly consequences, often without realising until it’s too late. We fully support the Insurance Fraud Bureau’s timely campaign to raise awareness and encourage anyone looking for insurance to stay vigilant. If an offer looks significantly cheaper than everything else on the market, or seems too good to be true, it probably is. Taking a few moments to check that a broker is legitimate could save motorists from significant financial and emotional distress later on.”