Ghost insurance brokers - your questions answered

Ghost car insurance brokers are thought to cost the insurance industry tens of millions of pounds every year, leaving thousands of drivers without cover. The AA claims that every day its own car insurance fraud team blocks up to a dozen attempts to obtain car insurance by suspected ghost brokers – and one of them could be yours. 

Ghost brokers typically advertise cheap, no-quibble insurance on social websites or forums where particular groups are targeted

But what is ghost insurance broking? In short, it’s a nasty scam that’ll con you out of lots of cash, and because it leaves you without cover you could be prosecuted for driving without insurance. Ghost insurance broking is a sophisticated scam that can be hard to identify, and nobody knows how many policies that appear legitimate are ghosted.

When they do come to light, the 'broker' will have disappeared while their victims are left with no insurance cover – and those victims are often landed with convictions for uninsured driving. To add insult to injury, their cars are frequently confiscated by police.

Ghost brokers typically advertise cheap, no-quibble insurance on social websites or forums where particular groups are targeted, such as students, drivers with convictions, drivers newly arrived from overseas or ethnic groups for whom English isn't the first language.

Policies are typically bought by ghost brokers from legitimate providers but with altered details and false contact information for the customer.  They may be paid for using false or stolen credit or debit cards, sometimes issued by overseas banks, while the buyer may be asked to pay cash.

Watch out for 

  • Guarantees to undercut any policy by a significant percentage
  • Fixed-price policies through a reputable company
  • Mobile numbers only or an unwillingness to provide contact details for the insurance company with whom the business is being placed

Protect yourself 

  • Only buy from legitimate sources - if in doubt check with an industry source such as the British Insurance Brokers' Association or the Motor Insurers' Bureau.
  • Beware of adverts guaranteeing to significantly undercut company prices or offering fixed-price insurance.  If the price looks too good to be true it probably is
  • Treat adverts that provide only email or mobile phone contact with suspicion
  • If you suspect you're a victim, check to see if your car is registered as being insured. If it is, check again from time to time because once an insurer realises the policy has been fraudulently obtained it will be cancelled
  • If you suspect you are a ghost broking victim, check with the company whose name is on the insurance certificate and contact Crimestoppers on 0800 555 111.

Wheel life

Well organised scammers run professional-looking websites.  In 2013 a sophisticated ghost broking network run by two criminals was smashed after taking £680,000 for worthless policies sold at 15% below the cheapest offered elsewhere.