Motorists warned to avoid ‘ghost brokers’ selling false or incomplete car insurance policies on social media

Car owners have been warned against buying insurance from “ghost brokers” on social media who sell policies that are non-existent or missing key details, leaving drivers uninsured on the road.

Scammers are increasingly targeting motorists online by selling them completely forged insurance policies, or selling them legitimate policies with key details, such as a driver’s address or claims record, changed in order to bring down the price, according to consumer advice group Which?.

Ghost brokers operate online – and particularly on social media – by advertising cheap car insurance policies using promoted advertising.

Which? analysed search results for “cheap car insurance” on Facebook, Instagram and TikTok, and found that more than half (25 of 47) profiles listed on Instagram were offering quotes to drivers but showed no signs of being authorised to operate by the Financial Conduct Authority (FCA).

In one example, a profile that offered customers “up to 50 per cent” off their premiums as well as a no-claims bonus scheme and “Speeding Ticket Removal” had 45,900 followers, more than the Instagram profiles of the five biggest insurance firms combined.

Following Which?’s investigation, the account has been taken down, along with a sister profile with an extra 15,200 followers.

On Facebook, seven pages of the 50 profiles Which? surveyed were found to be dubious, while two of the 50 profiles analysed on TikTok were suspect.

How to spot a ghost broker

No sign of FCA authorisation – In order to arrange insurance for you, a company or individual needs to be FCA authorised. You can double check this on the FCA’s website. If you cannot find evidence that it is regulated, avoid doing business with it.

Limited contact options – Most companies can be reached in multiple ways, including a landline number. If a seller will only interact via mobile phone, social media or a messaging app, it is best to steer clear.

Cagey about their methods – A genuine company should be able to explain, in understandable terms, how it can net you a bargain. If a broker is guarded or vague about what it does, take that as a red flag.

Insurance paperwork out of the blue – If an insurance company is writing to you about cover you did not take out, it could mean someone is basing a fraudulent policy at your address. Contact that insurer to let it know.

Unfamiliar activity on your credit report – It is good practice to check your credit report regularly. Searches or activity involving unfamiliar companies could indicate that someone is using your details to buy financial products.

Those who fall victim to ghost brokers are potentially liable for fraud and any penalties for driving uninsured.

The police can give uninsured drivers a fixed penalty of £300 and six penalty points if they are caught driving a vehicle they are not insured to drive. Cases can also be escalated to court, with an unlimited fine or a permanent disqualification from driving being the maximum penalties.

According to the Insurance Fraud Bureau, last year insurers collectively reported more than 21,000 policies that could be connected to the scam.

Victims will often not report being scammed because they are too embarrassed, or because ghost brokers will try to persuade them that their coverage is legitimate and their services are trustworthy.

Action Fraud said that 517 cases of ghost broking with total losses of £1m were logged in 2021, though there are many more victims who are unaware they have been targeted, Which? said. Younger drivers and those who are non-native English speakers made up the bulk of those losses.

Which? also set up false car insurance broker accounts on Facebook, Instagram and Tiktok and found the platforms were inconsistent with how they were policed.

For example, one Instagram account with a person’s name and two TikTok profiles offering “cheap car insurance” were only taken down after 35 days.

The consumer group has called for additional protections for customers to be included in the upcoming Online Safety Bill, which will give the communications watchdog Ofcom more powers to legislate online service providers.

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Jenny Ross, Which? money editor, said ghost brokers generally operate by stealth and “take advantage of those who feel locked out of, or bewildered by, the car insurance market”.

She added: “Social media sites must do much more to crack down on car insurance scammers that are infiltrating their sites and harming consumers, and should address these problems now, ahead of the Online Safety Bill becoming law.

“The Online Safety Bill should require platforms to tackle this type of fraudulent content. The government must ensure this happens by amending the Bill so that its definition of fraud does not allow some scammers to slip through the net and guaranteeing Ofcom is ready to enforce these new laws when they come into force.”

Speaking about Which?’s investigation, a spokesperson for Meta, which owns Facebook and Instagram, said: “We do not allow fraudulent activity on our platforms and have removed these accounts for violating our policies.”

A TikTok spokesperson said: “Our Community Guidelines make clear that we do not tolerate any kind of fraud or scams on TikTok and will continue to take an aggressive approach to removing this kind of content.”

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