Experts issue warning about ‘ghost brokers’ haunting the car insurance industry

With Halloween approaching, car insurance experts at Go.Compare are warning drivers to beware of ‘ghost brokers’ - fraudsters who pose as insurers, offering fake insurance deals at too-good-to-be-true prices.

Last year, Aviva alone identified nearly 7,000 cases linked to open ghost broking and application fraud investigations.* Ghost brokers lurk on social media, marketplaces, forums and other online platforms, masquerading as legitimate insurance companies or intermediaries, and target people desperate for a good deal.

Tom Banks, Go.Compare car insurance spokesperson, explains: “There are a few different ways a ‘ghost broker’ can operate. They might pretend to take out a policy in your name, and supply you with fake documents to convince you everything is above board - while your policy doesn’t exist.

“Or, they could actually take out the cover on your behalf, but alter your details - such as your address and driving history - to make the price of the policy cheaper. By charging you more than the quoted price, they can pocket the difference. It’s only when you go to make a claim that you might find out your details are incorrect, and that your claim is going to be rejected.

“Another trick ghost brokers play is to take out your car insurance policy legitimately, but cancel it soon after. This leaves them with your money, and you without cover.”

The comparison site says that the risk of being lured in by a ‘ghost broker’ may have grown in recent years, as social media has become a more popular tool for bargain hunting. Tom’s top tips for avoiding these imposters are:

1. Question the price - if they are offering a much lower price than you can find on comparison websites or via the insurer’s website, it may be too good to be true.
2. Consider the contact methods they’re using - a legitimate insurer is unlikely to conduct business over messaging apps or social media - and they certainly wouldn’t supply your policy documents through these channels.
3. Do your research - if they’re a legitimate insurance broker, they have to be on the FCA Register by law, so be sure to look them up.
4. Question it if they ask you for cash - if they try to persuade you to send cash, complete a bank transfer to an unverified account or pay in an unusual way, this may be a sign they are not legitimate.
5. Check documents for any errors and inconsistencies - look closely at any policy documents you are supplied - are they good quality, featuring the company’s up-to-date branding and all your correct details? For added confirmation your policy is legitimate, you can check your car’s insurance status on the Motor Insurance Database.

Tom added: “If you think you’ve been the victim of a ghost broker, we recommend reaching out to the car insurer you believe holds your policy and explaining the situation to them as soon as possible. This will help make sure you yourself aren’t implicated for any fraudulent activity.

“If your insurance policy isn’t legitimate, then it’s important to make sure you get a new one in place immediately, as you can’t legally drive your vehicle if it’s uninsured. We also recommend making a report to Action Fraud with as much detail as possible.

“If getting cheaper car insurance is important to you, there are ways to help make sure you get the lowest price possible without engaging with ghost brokers. You can read our top tips here.”

Read Go.Compare’s guide on how to check whether your car is insured: https://www.gocompare.com/car-insurance/guide/is-my-car-insured/.