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What is ghost broking?

In this day and age, cyber security is something that many of us learn as early as school... Be careful who you’re talking to online, don’t shop on a website you don’t trust… these are the types of things we’re taught. But has anyone ever mentioned the words “ghost broking” to you?

What is ghost broking?

Ghost broking is where someone sells you car insurance that doesn’t exist, or isn’t valid. It’s a type of insurance scam run by fraudsters (or “ghost brokers”) that tricks you into thinking you’ve found cheap car insurance, when actually you won’t be covered at all.

Imagine you’ve just bagged a super cheap (seemingly legitimate) car insurance quote that’s a good £500 less than you’ve been quoted everywhere else. Then a week later you get pulled over by the police for not having insurance in place. You confidently show them your car insurance policy (that you bought just a week ago!) and they break the news that you’ve been scammed and your policy isn’t valid. Not only will you have spent money that you probably won’t be able to get back, but you could be faced with a fine, penalty points and your car being seized.

Or worse, imagine you’ve secured your cheap insurance, get into a car accident and when you need to claim, you realise you don’t have cover in place at all.

This guide is going to tell you all about the world of ghost broking and how to spot and avoid car insurance scams.

Who could be a victim of ghost broking?

Ghost brokers tend to have the most luck scamming people who don’t know how the world of insurance works, or ‘high risk’ drivers whose insurance costs are more likely to be expensive. This typically means young or new drivers/students.

In fact, the City of London Police have recently revealed that it’s 17-29 year olds who are most at risk, with almost a third of the National Fraud and Cyber Crime Centre’s reports of ghost broking being from this age range. These reports totalled £113,500, almost three times the amount lost by 30-39 year olds. This means each 17-29 year old lost an average of £559 each.

However, because of the way that ghost brokers operate, anyone could be a victim.

Ghost broking and car insurance

Throughout 2020, the City of London Police announced that there was a nearly 10% increase in the number of ghost broking reports, despite the pandemic.

Ghost brokers seem to be finding newer and more inventive ways to take advantage of drivers during this difficult time for many. This includes offering NHS workers discounted offers on fake/fraudulent car insurance. As such, there’s never been a more important time to understand what ghost broking is and how you can avoid it.

What does ghost broking look like?

Ghost brokers normally work in a few different ways. Make sure you familiarise yourself with the ways they work so you can keep an eye out for any potential scams.

1. Fake car insurance communications

Ghost brokers have been known to contact potential customers through messaging apps like Facebook Messenger, WhatsApp, Instagram Direct Messages and Snapchat.

No official insurance company will actively reach out to you on any of these platforms, so it’s important to keep that in mind.

2. Fake car insurance advert

Ghost brokers usually advertise online (on social media, or within money-saving forums) and manage to attract drivers with the promise of cheap insurance – something which sounds very appealing when you’re a student, or are getting particularly expensive car insurance quotes.

A survey from YouGov and the Insurance Fraud Bureau found that one in three 18-24 year olds have spotted suspicious insurance adverts on social media.

However, ghost brokers can also operate on university noticeboards, marketplace websites (like Gumtree) and even in pubs/clubs/newsagents/car garages.

3. Fake car insurance quote

Ghost brokers often appeal to drivers by claiming to have a relationship with a legitimate insurance company and offer to help with getting a cheap car insurance quote.

If you give your details to a ghost broker, you’ll then receive a fake car insurance quote that will probably seem too good to be true (because it is). It’s this significantly cheap quote which lures in the likes of students and makes them think they’re getting a good deal and saving money.

4. Fake car insurance certificates

The car insurance documentation ghost brokers sell is fake/fraudulent and this is normally sourced in three different ways.

  • Buying real car insurance policies using fake details and amending them to re-sell to innocent drivers.
  • Buying real car insurance policies but altering each driver’s details to secure a cheaper price (making the policy instantly invalid)
  • Designing their own false documents which appear to be from real insurers.

They then sell these fake documents to people like you, making themselves a lot of money, but leaving you massively at risk (and out of pocket).

5. Fake no claims bonus

Did you know that a ‘No Claims Bonus’ (or No Claims Discount/NDB/NCD) is something which is earned, not bought? Many ghost brokers try tricking people into selling them a fake No Claims Bonus certificate to help bring the cost of their insurance down – but this kind of certificate doesn’t exist.

If you get caught (and you have a real insurance policy in place), this could void your insurance, increase the cost of your policy and may make a claim invalid.

What will happen if I've bought car insurance through a ghost broker?


If you’ve bought a fake policy through a ghost broker, this could mean you don’t have a valid car insurance policy in place. 

Third party insurance is the minimum legal requirement to drive in the UK, so it’s important to take out a legitimate car insurance policy as soon as possible to avoid penalties for driving without insurance – such as points on your licence, a £300 fine or even your car being seized. Don’t forget, an impounded car can be surprisingly expensive to get released!

A real-life example of ghost broking

The City of London Police have recently released a case study involving 18-year old student, Paul Jones.

Paul had recently undergone surgery, was attending university interviews and sitting his A-Level exams. He was also looking to insure his car.

His phone’s cookie settings meant that he was receiving advertisements on social media for car insurance. Paul came into contact with someone on Instagram who offered to use his contacts to get him a cheap insurance quote through Direct Line Group. Being under a lot of stress and keen to get cheap cover with no hassle, Paul went ahead and bought the insurance.

He provided his details to the contact and received the insurance documents in the post about a week later - everything seemed correct.

Paul went about his normal life, pleased that he now had insurance in place. However, he was unfortunately involved in a minor car accident a short while later. When he contacted his insurance, they told him that the policy had been cancelled because there were inconsistencies in the details that he’d provided.

The insurance staff talked Paul through the details of his policy, which included information about him being a homeowner, a student nurse and incorrect information about how long he’d owned the car. All of these things were false. The ghost broker had input this information to reduce the cost of Paul’s insurance, and then provided Paul with altered documentation with the information he’d originally provided.

Paul tried contacting the ghost broker, but they’d blocked his number and couldn’t be found on Instagram anymore.

This cost Paul a total of £2,200.

When asked about the experience, Paul said:

“I couldn’t believe what I was hearing when staff from Direct Line Group told me that my insurance was void and read out details from my policy that were completely wrong.

“It’s a horrible feeling and it’s really impacted on my ability to get future car insurance, as companies are now offering me even higher prices than before.

“I think a lack of experience and knowledge of the insurance industry was a big factor in why I was fooled. It’s important that people around my age be wary of offers of cheap prices for car insurance and always carry out the proper checks to ensure it’s legitimate."

Is ghost broking a type of car insurance fraud?

Yes, ghost broking is typically a car insurance scam because it’s easy for individuals to carry out a quote on your behalf via comparison websites.

As we mentioned above, car insurance can also be particularly pricey for the young or inexperienced, making new and learner drivers an ideal target for fraudsters. They’re also more frequent visitors of the social media sites where ghost brokers find the majority of their “customers”.

If you’re taking out insurance for the first time or have come across an advert or promotion via social media, carry out the following checks to avoid becoming a victim of car insurance fraud.

How to avoid car insurance scams

It can be easy to get tempted by the lowest price when it comes to your car insurance – especially for new and student drivers who tend to pay more for insurance than experienced drivers.

Unfortunately, this can also make these types of drivers more desirable targets for ghost brokers, which is why the Insurance Fraud Bureau (IFB) encourages drivers to carry out some basic checks before taking out a policy.

Here are some tips to avoid ghost broking and car insurance scams:

  • Check the broker’s website – is it professional? Are there typos? Does it have a Financial Services Register number displayed? If you can’t see the broker’s Financial Conduct Authority (FCA) number, ask for it – a registered broker will always be able to show this.
  • What was the process of getting a quote? A genuine broker will usually ask you around 30 questions for a car insurance quote, whereas a ghost broker may only ask a few. Consider the language used by the broker – would a professional company speak that way?
  • Check whether they’ve given you a fake car insurance certificate – does it have the FCA number? Does it include all of the correct details?
  • Be wary if you’re asked to DM or contact the broker via WhatsApp to purchase a policy or provide payment details – a genuine broker will never ask you to do this.
  • If the broker has set up a policy with a well-known insurer, contact them as well to check there’s a valid policy in place.
  • If you’re asked to log into an insurer’s website to make a payment, check the policy details that the broker has entered for you– such as your vehicle details, address, occupation and date of birth.
  • Keep an eye out to check if they’re offering cash incentives, as this can be a common sign of a ghost broker.
  • If you’re concerned once you’ve taken out the policy, you can also check your insurance status via the Motor Insurance Database

Reporting a ghost broker

Action Fraud is the UK’s national reporting centre for fraud and cybercrime. If you’re a victim of ghost broking, you should notify Action Fraud as soon as possible via their website >> https://www.actionfraud.police.uk/

Are there other types of car insurance fraud I should know about?

As mentioned above another common car insurance scam is individuals offering to sell fake No Claims Bonus.

It’s important to be aware that No Claims Bonus is not something you can purchase – it can only be earned. Therefore if someone approaches you to sell No Claims Bonus, it’s definitely a scam.

Insurers have systems to highlight people using fake No Claims Bonus, and could result in your car insurance policy being voided. This would not only invalidate any potential claim, but would leave you uninsured and potentially make it more difficult (or more expensive) to take out car insurance in the future.

Looking for car insurance?

Find out more about car insurance with Endsleigh Compare.