Reports of an increase in fraudulent motor insurance deals sold by ghost brokers on social media platforms rose by 6% last year, with further increases expected due to ongoing financial strain, according to the Insurance Fraud Bureau (IFB).
Exclusive findings from YouGov indicate that one in five 18-24 year-olds now use social media to search for car insurance deals, making these platforms prime targets for ghost brokers. The IFB's new insights reveal that TikTok and Snapchat are among the most popular sites for these fraudulent activities.
The General Insurance Fraud Committee (GIFC) has launched a campaign in partnership with insurers and police to raise public awareness about these deceptive deals. The IFB can uncover up to 50,000 fraudulent motor insurance policies annually, many linked to ghost broking.
Falling for a fake insurance deal can leave victims financially strained and at risk of having their vehicles seized for driving uninsured, the bureau says.
A case involving a student at Birmingham City University highlights the risks. She lost £2,000 and had her identity stolen after being duped by a ghost broker on TikTok. Despite asking thorough questions, she was manipulated into trusting the broker.
Ursula Jallow (pictured above), IFB director, noted that young people increasingly turn to social media for deals, often resulting in significant financial loss and legal trouble.
“We're helping young drivers to recognise the warning signs of a Ghost Broking scam as part of this national campaign. If anyone thinks they've seen a fake insurance deal they can report it anonymously to our confidential CheatLine,” Jallow said.
Detective Chief Inspector Tom Hill of the City of London Police’s Insurance Fraud Enforcement Department (IFED) also emphasised that the cost of living and low-paid part-time jobs make students and young adults ideal targets for ghost brokers.
“It truly does pay to make sure you’re getting the real deal when buying an insurance policy. A bogus car insurance policy could mean facing a fine, points on your licence, your car being seized and crushed, not to mention covering the cost of a new, valid policy,” Allen said.
Mark Allen, ABI head of fraud and financial crime, stressed the importance of verifying insurance deals.
“Beware of offers advertised on social media and contact insurance companies directly or check the Financial Services Register to verify broker details. The golden rule is to never act in haste – if a deal seems too good to be true, then it probably is,” Allen said.
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