Criminals posing as legitimate insurers are increasingly targeting UK motorists with "ghost broking" scams, selling fake or invalid car insurance policies.
Victims can face severe consequences, including court action, driving bans and financial losses, while their personal data may be exploited on the dark web.
According to a report from The Guardian, ghost broking fraud has shifted online in recent years, with scammers using social media ads and AI-generated websites to lure victims. Typically, young drivers aged 17 to 25 years old are targeted, as they face high premiums and are active on social media. After providing personal details and paying a fee, victims are sent a fake certificate or an altered copy of a real policy purchased under falsified details, leaving them effectively uninsured.
The scale of the problem is growing. Aviva recently reported a 22% increase in ghost-broking since 2023, with victims losing an average of £2,000. Action Fraud recorded 817 reports in 2024, a 24% increase over the previous year, with losses averaging £2,207 per victim. Meanwhile, the Insurance Fraud Bureau (IFB) noted that ghost broking accounts for roughly one-third of insurance fraud investigations, contributing to the £88.2 million of fraud investigated in 2023.
Scammers often manipulate policyholder details to obtain cheaper premiums, which distorts insurers’ risk models and increases underwriting exposure. The growing prevalence of ghost broking also elevates fraud detection costs, reputational risks, and regulatory scrutiny for insurers. City of London Police’s Insurance Fraud Enforcement Department (IFED) reported a 52% rise in detected activity from 2022 to 2024, highlighting the need for coordinated action across the industry.
Because of the risks, drivers are advised to remain vigilant. According to report, authorities recommend that policyholders only purchase insurance through brokers registered with the Financial Conduct Authority (FCA) and verify policy details directly with the provider - something that would be music to the ears of the industry, if customers actually followed the guidance.
The continued rise of ghost broking underscores the importance of both consumer awareness and robust insurer safeguards.
As online fraud techniques evolve, the insurance industry faces mounting pressure to detect, prevent, and respond to scams while protecting customers from the financial and legal consequences of being unknowingly uninsured, the report said.
