Young drivers buying fake insurance policies

Young drivers have been warned to resist attractive and heavily discounted car insurance offers on social media sites such as Instagram, with recent findings suggesting that 17-24 year olds are most likely to fall prey to so-called ghost brokers.

Analysis provided by price comparison site GoCompare has revealed that young men in this age bracket are particularly susceptible to this insurance scam, which targets people with discounted deals on social media and uses forged insurance documents in order to offer a lower premium. Non-English speaking communities were also said to be at risk.

Typically, drivers who purchase insurance cover from these ghost brokers are unaware that their cover is fake and often do not discover this until they attempt to make a claim. The penalties for driving without valid insurance can cost an average of £769 per driver alongside penalties.

It’s easy to see why young drivers, typically subject to higher premiums as they are deemed a bigger insurance risk, would fall for such a scheme, but with the Financial Conduct Authority sending out three warnings this year regarding unauthorised brokers, it’s clear that more work needs to be done to combat the issue. In 2019, Delta Car and GLC Car Insurance have both had their practices exposed by the watchdog.

“Younger, less experienced drivers pay more to insure their cars – which makes them particularly susceptible to adverts for heavily-discounted insurance,” offered GoCompare’s head of Fraud Detection and Prevention, Fleur Lewis. “Ghost brokers often operate on social media, especially Facebook and Instagram, where they often use imagery and logos of established insurers to enhance their believability.”

“Ultimately, ghost broking has a detrimental effect on all drivers by increasing the cost of insurance premiums for everyone. It’s a growing problem, which the insurance industry and law enforcement agencies are working together to tackle.”