Young motorists are being urged to take extra care when buying car insurance.

It comes amid a sharp rise in “ghost broker” scams that are leaving thousands unknowingly uninsured and facing fines, vehicle seizures and driving bans.

Social media appears to be providing the perfect cover for the fraudsters.

Now you see it…

The Financial Conduct Authority (FCA) has issued a fresh warning about the growing trend of fraud, which primarily targets drivers aged 17 to 25 via social media platforms and messaging apps.

Ghost brokers are fraudsters who pose as legitimate insurance intermediaries, offering apparently cheap motor insurance deals online.

Victims are often sold fake policies, invalid cover using falsified details, or genuine policies that are cancelled shortly after purchase without the driver’s knowledge.

The problem is becoming increasingly widespread as soaring insurance premiums push younger drivers to search for cheaper deals online.

Research cited by the FCA found that almost half (49%) of young drivers have bought insurance through social media or messaging apps, while 39% admitted they would not feel confident spotting a fake policy.

 

Haunting experience

Victims often only discover they have been scammed after being stopped by police or attempting to make a claim following an accident.

Because no valid insurance exists, drivers can face penalties including a £300 fixed penalty, six points on their licence, vehicle seizure and potentially a driving ban.

In some cases, motorists also find their personal data has been stolen or used for further fraud.

Insurance giant Aviva says ghost broking cases it has detected have increased by 22% since 2023, with young motorists the main targets.

The insurer estimates victims lose around £2,000 on average, including fake premiums and additional fees charged by scammers.

Aviva also revealed that one suspected ghost broker was believed to have made around £150,000 by selling fake insurance policies online.

Online, on crime

Fraudsters increasingly operate through platforms such as Instagram, TikTok, Snapchat and Facebook, often using convincing fake websites, forged insurance documents and cloned branding from genuine insurers.

The Insurance Fraud Bureau (IFB) says the rise of social media marketplaces has made it easier for criminals to target inexperienced motorists looking for cheaper insurance.

A spokesperson for the FCA warned motorists to be sceptical of deals that appear “too good to be true”.

Consumer experts say younger drivers are particularly vulnerable because insurance costs remain exceptionally high for newly qualified motorists, especially in urban areas.

Separate reporting has highlighted cases where 17-year-old drivers face annual premiums exceeding £3,000, creating strong incentives to seek cheaper alternatives online.

Safety concern

Road safety experts warn that ‘ghost broking’ poses broader risks beyond financial fraud, as uninsured drivers involved in collisions may leave victims without proper compensation.

There are also concerns that some ghost brokers deliberately falsify driver details, such as age, address or occupation, to obtain cheaper quotes from legitimate insurers, leaving policies invalid even though they initially appear genuine.

The IFB says many victims believe they are fully insured because their vehicle may temporarily appear on insurance databases before policies are cancelled.

Online discussions among former insurance workers suggest some fraudsters use fake contact details so cancellation notices never reach the driver.

 

Tougher action

Insurers and anti-fraud organisations are now calling for stronger enforcement against ghost brokers and greater cooperation from social media companies.

Aviva has urged tougher penalties and faster removal of fraudulent online accounts, while the FCA is encouraging drivers to check whether brokers are authorised using its online register before making payments.

The Financial Ombudsman Service has also warned that consumers risk “serious consequences” if they unknowingly buy invalid cover.

Experts advise motorists to avoid paying by bank transfer, to be wary of unusually low quotes, and to always verify policies directly with insurers.

As insurance costs continue to rise, social media is providing fraudsters with simple yet increasingly sophisticated ways to defraud novice young motorists.

Campaigners warn that the problem of ghost broking is likely to grow further unless awareness and enforcement improve significantly.