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There’s been a concerning rise in the amount of ghost broking happening on social media platforms – particularly Instagram and TikTok – where there are countless scams targeting unsuspecting consumers with too-good-to-be-true insurance premiums. Similar schemes have been popping up on money-saving forums and student websites, too. For those looking to save money and avoid annual insurance costs, we would always recommend temporary car insurance as the best option, if you don’t use your car often. 

But what is ghost broking, and how can you avoid this increasingly common car insurance scam?

What is Ghost Broking?

Ghost broking is where people fraudulently pretend to be insurance brokers and offer to arrange insurance for drivers, in exchange for money. In actual fact, all they’re doing is plagiarising documents from real brokers and fabricating other paperwork to imitate authentic car insurance policies. Because this paperwork is often copied from genuine brokers, it can appear legitimate to those who’ve been targeted – making it particularly difficult to distinguish the scam. As ghost brokers tend to target people who don’t know how insurance works in the UK, younger drivers (especially students) and people who don’t speak a great deal of English often fall victim to this scam. It is illegal to drive in the UK without valid insurance, so if you end up driving around with plagiarised insurance from a Ghost broker, you could land yourself in hot water.

How is Ghost Broking Happening?

Ghost brokers operate in a number of ways. They might use their own valid insurance documents, but change the dates and names so it looks like it belongs to you – in reality, there’s no policy in your name at all. Another tactic they use is to buy a legitimate policy, but cancel it and pocket the refund – either way, you’ll be driving around uninsured.

Many people are falling for ghost broking scams, due to the deals they offer, but the lower-than-average prices are down to the use of fraudulent information. When purchasing a policy on your behalf, ghost brokers enter false information to make the costs cheaper. For instance, a young driver who only passed their test a few months ago could expect to pay a much higher premium than someone who’s been driving for many years. A ghost broker would lie about your age and other details (like your address, your car, your job), to bring down the cost, without your knowledge. In these cases, although a legitimate policy has been purchased, the inaccurate information used to get a lower price completely invalidates the policy. 

When insurers discover fake policies, they typically cancel or void the insurance – and a history of voided policies will likely affect your ability to secure legitimate insurance in the future.

Driving without insurance means risking a whole host of serious penalties, including having your car impounded. This is why it’s absolutely crucial to know you’re purchasing insurance with a legitimate broker, and avoid any ghost broking scams.

How to Identify a Legitimate Insurance Broker

Legitimate insurance brokers will be regulated by the Financial Conduct Authority (FCA) – the body responsible for ensuring customers receive fair treatment from financial services companies. The FCA’s code of conduct also means they’re less likely to treat customers unfairly, and if you feel you’ve been mistreated, you can (and should) make an official complaint to the Financial Ombudsman – a free and easy-to-use service that settles complaints between consumers and businesses that provide financial services. 

If an insurer is regulated, they’ll have an FCA number which will typically be displayed prominently across their websites. Ours is 751221 – it’s at the bottom of every page. With this number, you can search the FCA’s register to check if the company is a legitimate one you can trust. (If it isn’t FCA-listed, don’t pursue the purchase.)

It’s also worth checking the Motor Insurance Database (MID) once you’ve bought a policy, using askMID, because any valid insurance policy will be listed on there. It might take some time to come through though – especially if you’ve just bought temporary insurance – so don’t worry if your policy hasn’t immediately shown up on the MID. As long as you keep hold of your policy documents, you’ll be fine.

We know how important it is for our customers to purchase an insurance policy with confidence. Whether that cover lasts for one hour or 28 days – we can guarantee you’ll be driving off fully insured and positive you won’t be facing any nasty surprises down the line. We’ve even been recognised for our work in the sector, winning The Insurance Times Awards prestigious Personal Lines Broker of the Year for 2023 most recently. 

What Happens if You Fall For a Ghost Broking Insurance Scam?

As it stands, there’s no legal distinction between a victim of insurance fraud and someone deliberately breaking insurance laws. If you’re caught driving without insurance, the police could give you a fixed penalty of £300.00 and 6 penalty points – which is likely to make your insurance even more expensive in the future. If the case then goes to court you could receive an unlimited fine and/or be disqualified from driving entirely. 

The police also have the power to seize, and in some cases, destroy the vehicle that’s being driven uninsured. There’s actually been a significant year on year rise in the number of vehicles being seized – or impounded – in the UK, with approximately 197,000 cars being seized in the past year alone. There’s likely a partial correlation between this rise and the growing prevalence of ghost broking scams, with more and more motorists having to face the consequences of driving without insurance. 

If you’ve been targeted by a ghost broker and your car’s subsequently been impounded by the police, you’ll need to explore your options to get back on the road. Luckily, there’s such a thing as impound release insurance, to get you back on four wheels in no time, via a legitimate insurance broker. 

It’s also imperative to report the ghost broker to the police. To stop them being able to target other people, give the police all the details you possibly can about the person who sold you the fake policy. You might also want to report to Action Fraud – the National Fraud & Cyber Crime Reporting Centre – as they’ll be able to pass information about the scam to insurers, and try to prevent any further ghost broking. 

It’s really easy to fall foul of ghost broking fraudsters, and customers who’ve been scammed shouldn’t feel embarrassed. Just remember, if in doubt – check the FCA and MID, and ensure any future purchases you make are through legitimate, trustworthy brokers. Discover our award-winning temporary car insurance today. 

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