DRIVERS have been warned to watch out for a terrifying “ghost broking” scam that has already stung 50,000 Brits in the past year.
Motorists could find themselves unwittingly shelling out thousands to criminal gangs – while inadvertently breaking the law themselves.
With insurance premiums at an all-time high, it is always a good idea to shop around to get the best deal.
But if you come across a rate that looks to good to be true, it could be a sign of foul play.
The crime, known as “ghost broking” is a form of insurance scam designed to dupe car owners with fake ads.
All legitimate insurers are regulated by the Financial Conduct Authority (FCA), the watchdog for financial services in the UK.
But the Insurance Fraud Bureau (IFB) has reported a significant rise in the prevalence of unregulated insurance providers.
Dubbed “ghost brokers” because they don’t officially exist, they often target those struggling to find low-cost insurance and tempt them in with unbelievable rates.
They then convince drivers to pay for an insurance policy which isn’t actually valid.
Others simply take the money and run without even bothering to provide false policy documents.
Nicola Smith, the IFB’s Intelligence & Investigations Manager, urged motorists to take care and stick to insurers they know to be legitimate.
The fraud expert warned that the dodgy dealers can sometimes be almost indistinguishable from the real thing.
She told AutoExpress: “A ghost broker is an individual purporting to be an insurance broker but who isn’t authorised by the Financial Conduct Authority to provide those kind of services.
“They usually sort of operate on social media or Facebook or Instagram, and they often target younger individuals whose legitimate insurance policies would probably cost a fair amount.
“They may still charge an inflated cost to the customer, but essentially the policy will be invalid because the details provided are incorrect.
“It might be that the ghost broker used a different email address so that the victim might never receive anything.
“And if they’re naive to how insurance legitimately works, they might not realise that’s a problem.”
The IFB’s data suggests that 50,000 Brits fell victim to broking scams in 2023 alone, a 6% increase on the year before.
To keep yourself safe from scammers, the experts recommend sticking to established providers where possible.
If you find a better deal, ask a trusted provider to match it, which they often will do.
However, if you have to go with an unknown insurer, make sure they are FCA-regulated.
A full list can be found on both the FCA and Bank of England websites.
