How to protect young drivers from ‘ghost brokers’

A recent survey by Aviva has uncovered a startling trend among young drivers in the UK: one in three have purchased car insurance from illegal ghost brokers.

These fraudulent intermediaries pose as legitimate brokers, often targeting young drivers who struggle to find affordable insurance. They sell what appears to be valid insurance policies, but these are typically worthless, leaving drivers unprotected and at risk.

The survey, which included 2,000 drivers under the age of 25, found that 30% admitted to buying fake insurance from social media platforms. The consequences of this are severe: 89% of those who bought insurance this way faced serious issues, such as having their claims rejected or being stopped by police for driving without valid insurance. This not only leads to financial loss but also legal troubles and potential driving bans.

What is a ghost broker?

A ghost broker is a fraudster who poses as a legitimate insurance broker to sell fake or invalid insurance policies. They often target individuals looking for cheap insurance deals, particularly for car insurance. Ghost brokers use various tactics, such as forging insurance documents, altering details to reduce premiums, or setting up and then cancelling genuine policies to pocket the refund. Aviva has been proactive in combating this fraud, stopping or removing nearly 17,000 policies in 2024 alone.

Their victims fully believe they have valid insurance and complied with the law. But in reality, they are uninsured. This can lead to severe consequences, including fines, penalty points on their driving license, and liability for any damages in the event of an accident!

Buyer sense checks

To avoid falling victim to ghost brokers, young drivers should take several precautions:

Be wary of super-cheap deals

If an insurance deal seems too good to be true, it likely is. Ghost brokers lure in victims with the promise of significantly lower premiums, but these policies are often invalid.

Verify the broker’s registration

Always check if the broker is registered with official bodies like BIBA (British Insurance Brokers Association) and the FCA (Financial Conduct Authority). This can be done through their websites or by contacting them directly.

Avoid social media brokers

Legitimate brokers will have a professional online (or in our case, also branch) presence, including a website and contact information. Be cautious of brokers who only operate through social media platforms.

Look for poor spelling and vague details

Communications from ghost brokers often contain poor spelling and grammar, as well as vague or incomplete details about the policy. Never ignore these red flags!

Report suspected fraud

If you suspect you have been a victim of ghost broking, report it to CheatLine or call 0800 422 0421. Reporting fraud helps authorities track down and stop these illegal operations.

How young drivers can get the right cover

Having valid car insurance is not just a legal requirement; it is essential for protecting yourself and others on the road. Without proper insurance, you could face significant financial and legal consequences. It just isn’t worth the risk – a few quid saving could cost an uninsured driver a lot more than they could ever have bargained for.

This is why it is crucial to ensure that your insurance policy is legitimate and that you are dealing with a reputable broker.

For young drivers, finding affordable and legitimate insurance can be challenging, so it’s a good idea to use a reputable broker to do the heavy lifting for you. Many insurers offer specialised policies for young drivers that provide comprehensive coverage at competitive rates, and using a broker means a wide panel of insurers can be reviewed, making life that little bit easier.

Using a ‘real’ broker!

Here at Howden, it’s important to us to make sure young drivers are properly protected on the road. It’s having that expert support at the very start of the process that can help navigate the complexities of car insurance that can make it an altogether less stressful experience, while we’re also there to support in the event of a claim as well.

And even more important, we’re available to speak to in person or over the phone, because we’re real people! Find a branch near you, pop in or give them a call.

This is a marketing blog by Howden Insurance.