Ghost brokers are fraudsters who claim they can get cheap car insurance for a customer, but in reality leave them without valid cover. They often advertise their services on social media, either posing as big-name insurance brands or claiming they can get cheaper insurance from these brands.
The problem is widespread and has been hitting the headlines, but many people aren’t aware of the dangers. Here’s our guide on how to spot a ghost broker and avoid making a costly mistake.
How do ghost brokers break the law?
There are three main ways in which ghost brokers operate their con:
- Forged insurance documents. Realistic looking but fake insurance documents are created to fool you into thinking the broker has got you a great price, often with a well-known brand.
- Using false details. A real insurance policy is bought using false details, with the aim of getting a low price. Documents are then changed to include your details.
- Cancelling real policies. The broker buys a real insurance policy, but cancels it once you’ve paid them. The broker pockets the refund.
In all cases, you’d pay these scammers for insurance, but get nothing in return as the cover isn’t valid.
What happens if you buy from a ghost broker?
Customers who buy insurance from a ghost broker will often believe they’re insured up until the point they need to claim or until they’re caught driving an uninsured car by the police.
In the best-case scenario, you’d have to buy new car insurance – on top of what you’d already paid the broker.
However, driving without insurance on a public road is illegal, even if it’s because you unknowingly bought from a ghost broker.
You could face anything from a fine and points on your licence to having your vehicle seized and destroyed.
If you’re found to have knowingly used a ghost-broker, companies may bar you from purchasing insurance in the future.
How do you avoid becoming a victim of a ghost broker?
Buy direct from insurers or use a price comparison site
Direct Line doesn't sell on social media sites, so don't buy through these. Go direct to insurers you trust instead.
If you want to check the cost of cover across other insurers, use a comparison site which is registered with the Financial Conduct Authority (FCA).
If you use a broker, make sure they're trustworthy
Don’t buy via a broker who’s advertising on social media, especially if the deal sounds too good to be true. Reputable brokers conduct themselves within a framework set out by the Financial Conduct Authority (FCA).
If you have any doubts about a broker, you can check for them on the Financial Conduct Authority’s or the British Insurance Brokers’ Association websites.
What should you do if you’ve bought from a ghost broker?
You could contact the insurance provider directly to ask if your car’s covered and confirm they hold correct details for you.
To report a ghost broker or suspected ghost broker contact:
Direct Line Fraud Referrals
Email: Direct.Referral.Team@directlinegroup.co.uk
Direct Line’s trying to raise awareness of these scammers, making them easier to spot and avoid. We’re tough on fraudsters, doing all we can to offer the very best value to our law-abiding customers.
Stuart Stevens, Head of Commercial and Policy Fraud at Direct Line Group says:
“The Insurance Fraud Bureau (IFB) and Association of British Insurers play a key role in tackling the issue of ghost broking, fraudsters selling fake insurance, often through social media platforms.
Our teams actively monitor social media platforms to identify criminals engaged in ghost broking. We work continuously to protect our customers from these scams to ensure the polices purchased are only legitimately sold by us.
Innocent consumers could find they lose money and potentially face criminal charges if they fall victim to a ghost broker. We have stringent processes in place to identify fraudulent insurance applications and anyone we suspect of operating as a ghost broker will be reported immediately to the authorities.”
If you have a Direct Line policy and think you might be a victim of ghost broking, please call our fraud helpline on 0345 306 4117.
