As the cost of living rises it fuels fraudulent activity as more people hunt for better deals in an attempt to save and reduce the burden on their pockets.

Ghost broking is a type of insurance scam, whereby a “ghost broker” (the scammer) falsifies documents to make them look genuine and tries to sell drivers car insurance that isn’t valid or doesn’t exist.

Victims of ghost broking find themselves out of pocket and are forced to buy another policy, wasting £1,000’s or worse, drive uninsured, and only realise they’re unprotected when they need to make a claim.

Consumer champion, Which? has called on social media platforms to do more to crack down on car insurance scammers.

Ghost brokers primarily operate online, on social media or advertise on money saving forums, where they offer too-good-to-be-true premiums.

Darryl Bowman from leading flexible car insurance provider, Cuvva commented: “If it’s too good to be true, it most probably is. Ghost brokers tend to target drivers they think will be less familiar with insurance. This includes students, who are new to driving and are faced with higher premiums or people from outside of the UK, where English isn’t their first language.”

Different types of ghost broking

Ghost broking usually works in one of three ways.

Forgery
A ghost broker alters real insurance documents to make it look like they belong to someone else. They might use their own, valid insurance documents, and change the dates and names so it looks like it’s yours, but there’s no policy in your name.

Falsification
A car insurance policy is bought on your behalf, but without your knowledge, the ghost broker uses fake data, including age, postcode and the car you drive to make the policy much cheaper.

Even though there’s a policy in place, it’s a fraudulent one and an insurer will likely cancel or void your policy when they find out. It can affect you getting insured in the future.

Cancellation
Ghost brokers buy a legitimate policy using your real details, send you all the documents, and then cancel the policy and pocket the refund, leaving you driving uninsured.

Not only do you lose the money you paid for the fake insurance policy, and you have to buy a new valid policy, you also run the risk of driving uninsured which can lead to a fine and points on your licence.

How to make sure your insurance is valid?

Avoid buying insurance from people you come across on social media, money saving websites or businesses that aren’t regulated.

Before buying any insurance, check that the insurer is regulated by the Financial Conduct Authority (FCA).

To check if an insurer’s regulated, you need to get their FCA number. Most regulated companies will display their FCA number fairly prominently on their website. You can go to the FCA’s register, type in the number, and see if the company is registered. You can also search for the company name in the FCA’s register.

You can also visit the Motor Insurance Database (MID) to make sure you have a valid insurance policy. It can take a bit of time to reflect on MID if you’ve just purchased a policy.

Report ghost broking

The first thing to do is tell the police. Give them as much detail as possible about the person who sold you the insurance.

Contact Action Fraud, who’ll pass the information onto insurers, to help prevent it happening to other people in future.