Insurance giant Aviva has issued a stark warning regarding a surge in “ghost broking” scams, primarily targeting young drivers and costing them thousands.
The insurer’s data reveals that motorists aged 17 to 25 are the prime victims, typically losing around £2,000 per fraudulent motor insurance policy.
This sum includes an average premium of £1,700 paid to the scammer, alongside an additional £300 in associated fees.
Aviva has reported a significant increase in ghost broking detections this year.
Ghost brokers are not legitimate insurance providers but criminals who lure drivers with seemingly cheap policies.
Their methods vary: they may issue entirely fake documents, falsify personal details to artificially reduce premium costs, or even purchase a genuine policy only to cancel it shortly after.
Often people do not realise their insurance is fake until they are stopped by police or involved in an accident.
As well as the average £2,000 loss to the fraudsters, people with a fake policy could face being liable for costs for any injuries or damage caused while driving without cover, having their car seized by the police, and court action.
“People may also end up being victim to identity fraud if the criminals sell their personal details on.
Many scams start on social media and Aviva said it has identified a sharp rise in ghost broking scams using fake, professional-looking websites that impersonate legitimate insurers.
Owen Morris, UK personal lines chief executive at Aviva, said, “Ghost broking is a fast-growing criminal enterprise that targets young drivers on social media sites.
“These fraudsters exploit social media to sell worthless insurance, leaving victims thousands of pounds out of pocket, driving without insurance, and at risk of prosecution. They could also potentially be victims of identity or banking frauds in the future.
“The scale of the problem is concerning – and it’s getting worse.”
He added: “Our message to young drivers is simple: Before buying insurance on social media, always check the seller is genuine before you pay.”
Aviva suggests the following to avoid falling victim to ghost brokers:
- Be cautious about anyone selling insurance on social media.
- Verify who you are dealing with. Contact insurers directly and check the Financial Services Register. Check registrations with the British Insurance Brokers’ Association (Biba) and the Financial Conduct Authority. Biba can help young drivers, who often pay more for their policies, to find legitimate insurance.
- Anyone suspecting they have been a victim of ghost broking or other fraud should report their concerns to the police.
