Recent data from LV General Insurance has revealed that there has been a 31% increase in insurance policy fraud, due to a growing number of ghost brokers and fake insurance scams. These recent scams have been targeting particularly young and vulnerable members of the public who have little experience in dealing with car insurance policies.  

In recent months, this has particularly been an issue due to rising prices caused by inflation.

What is a ghost broker?

A ghost broker is a term that is used to describe fraudsters who pretend to be legitimate insurance brokers. They typically appear on social media platforms such as Facebook, WhatsApp, Instagram and Tik Tok, offering low-priced premium to the public.

They can also appear on money-saving forums and student websites.

How to avoid ghost brokers

·        Check the Financial Conduct Authority (FCA) register to make sure that the insurance broker is genuine

·        If the insurance broker asks you to send an admin fee payment into a different account, this might be a scam

·        Be aware of brokers that approach you on social media. It’s good to seek advice from others on forums or groups, however you may need to be extra careful when you do so. Sometimes brokers may personally approach you if they can see that you’ve been searching online for insurance brokers.

·        Is the deal too good to be true? If you think it might be, avoid the broker

How can I check my insurance policy?

You can check the validity of your motor insurance policy by searching for it in the Motor Insurance Database that is run by the Motor Insurers' Bureau (MIB). Even if your insurance is listed, double-checking with the insurer to ensure you have legitimate cover is a good practice.

Reporting ghost brokers

The police should be informed right away. Give them as much information as you can about the insurance and the person who sold it to you.

Additionally, you should report this to Action Fraud and Insurance Fraud Bureau, who alert insurers about these issues. You can call Action Fraud on 0300 123 2040, while the Insurance Fraud Bureau has a confidential Cheatline on 0800 422 0421.