1. Home
  2. Car insurance
  3. Car insurance guides

Ghost brokering: how to avoid being scammed

We’re all encouraged to hunt down the best car insurance deal, but sometimes the cheapest price isn’t worth the paper it’s written on. You could be scammed.

 Missed calls on a phone screen

What is ghost broking?

Ghost broking is fraud, a serious offence that usually carries a custodial sentence. So, if the penalty is so harsh, why are so many crooks risking their liberty to sell fake insurance policies?

You don’t need to be Sherlock Holmes to deduce that there’s money to be made in dodgy policies. According to our car insurance price index, the average cost of car insurance in spring of 2021 was £538.

Add the cost of fuel, which is upwards of £1.25 a litre on average, plus car tax. You can quickly see why a firm contacting you out of the blue, offering cut-price car insurance might be appealing.

Just recently, Premium Credit revealed 24% of those took on more credit to pay for insurance over the past 12 months have struggled to afford policies.


How do I know if my car insurance is genuine?

It’s probably the most hackneyed phrase in history, but the old ‘if it seems too good to be true, it probably is’, carries weight.

The problem with this mantra is it’s so loud it almost becomes background noise. The best way to think about scams is that they’re run by clever people who rely on you to slip up.


How do I avoid ghost broking and fake car insurance policies?

No one is infallible. We all have off days and this is what the crooks count on. But if you follow some simple rules, you can at least reduce your chance of falling foul of a scam.

Top of the list is avoid responding to an unsolicited email, text or phone call.

Ask yourself the question, why would an insurer call you out of the blue? They wouldn’t, so it might be best not to get involved.

If you look at what you’ve been paying for insurance in the past, you can expect something in the same ballpark.

If someone contacts you with a deal that’s significantly lower than what you’ve been quoted, it’s likely to be dodgy.

The easiest way to compare legit insurance policies is to compare car insurance through a comparison site.

Compare car insurance quotes


What happens if I buy a fake car policy?

Falling foul of a ghost broker is a double whammy. Not only would you have given hundreds of pounds to a criminal, the chances are you won’t realise this immediately.

This means you could be driving without valid insurance.

To rub salt in the wound, the police might not be sympathetic. Driving without insurance is an offence, leaving you open to up to £300 in fines and six points on your licence.

Also, the police are entitled to seize your car.

You could also find yourself complicit in a criminal act if you suspect that the insurance document you’ve purchased for peanuts is a fake.

If that’s not enough of a bad deal, if you’re involved in a road traffic incident could face criminal court action.


How do I know if a car insurance company is real?

When it comes to fraud, never compromise. Always report any suspicions you have regarding a dubious website or company to Action Fraud.

You can also use their service to report any suspected identity fraud.

You can also check the insurer is registered with the Financial Conduct Authority. Be aware that crooked companies aren’t beyond using legitimate firm’s details.

For this reason, double-check contact details.

If you suspect a company or individual of using your address, car registration or other details, contact your car insurer immediately.

If you don’t, you could be considered complicit in any subsequent criminal activity.


How can I spot a ghost broker?

You need to be on your guard when it comes to spotting a scam. The crooks behind ghost broking aren’t stupid. All they need is one person an hour to fall for their scam and they’re quids in.

Not only do they have your cash, they can also sell your details onto so-called ‘suckers lists’. This is a role call of people who’ve fallen for frauds and are therefore seen as easy pickings.

If you want to avoid adding your details to such as list:

  • Never respond to an unsolicited email, or other contact.

  • If you get a message that seems too good to be true, use a search engine to open the insurer’s homepage. Don’t trust any site that contacts you first.

  • Check that you’re insured. Some ghost brokers will take out a legitimate policy for you then cancel it, and pocket the cash.


Who do ghost brokers target?

Ghost brokers are canny. They know that 17-to-25-year-olds pay more in insurance than any other age group. According to our price index, 18-year-old drivers paid £1,442 for their car insurance at the beginning of 2021.

This is one reason why young drivers are targeted. Another is the simple fact that novice motorists lack the experience to spot a scam.

As for where you might come across a scam site, con-artists have been known to advertise on:

  • Money saving forums

  • University notice boards

  • Marketplace sites like Gumtree.

There've been cases of ghost brokers advertising in pubs, newsagents and car repair shops too.

Many legitimate insurers advertise using social media, but it’s also a perfect platform for ghost brokers to exploit by advertising cheap insurance, so keep alert.


What’s the best way to get a good deal on car insurance?

The simplest, easiest, most reliable way to get quality car insurance cover is to do your own research.

We offer access to a wide range of car insurance providers, all checked, so there’s no risk of a crooked firm sneaking through the internet.

You can also check out the Financial Conduct Authority’s list of unauthorised firms and individuals, and report any dubious activity that you come across.