City of London Police warns of the ongoing threat of ‘ghost broking’ to young people as students head back to university

The City of London Police’s Insurance Fraud Enforcement Department (IFED) is reminding young people to remain wary of ‘ghost brokers’ as this age group continues to be a target for this type of fraud.

The latest figures, released today, show that 17-29 year olds remain the most likely age group to fall victim to fraudsters selling fake car insurance, also known as ‘ghost brokers’, with a number of these victims likely to be students.

From January to August 2021, Action Fraud, the national fraud and cyber crime centre, received 351 reports of ‘ghost broking’. Whilst the number of reports has decreased by nearly a quarter (23 percent) from the same period last year, young people continue to make the most reports for this type of fraud, with over a third (34 percent) of reports coming from 17-29 year olds during this period.

Figures also show that male drivers continue to be the most affected by this type of fraud, with more than half (61 percent) of reports during this period submitted by men. Of the reports made by 17-29 year olds, over half (62 percent) were from men.

The reported losses to ‘ghost brokers’ for all age groups totals £786,700 so far this year, with the average victim losing around £2,250.

Detective Chief Inspector Edelle Michaels, Head of the City of London Police’s Insurance Fraud Enforcement Department (IFED), said:

“Whilst it may be an exciting time of year for students who have either returned to university or started out on their higher education journey, we urge young people to make sure that they are properly insured. Many students rely on their cars to travel to and from university or around where they study, and so may have recently restarted or renewed their insurance after the summer break.

“The high cost of insurance premiums and money often being tight for students unfortunately make this group a prime target for ‘ghost brokers’, therefore it is important to check that you have signed up for a legitimate insurance policy. Whilst the offer of a cheap deal may be enticing, a fraudulent policy will end up costing you more in the long run in the form of a fine, points on your licence, your car being seized and crushed, and covering the cost of a valid policy.”

During the summer, IFED executed a week of action across the country to tackle the ongoing issue of ‘ghost broking’. The arrests highlighted the immoral tactics used by these criminals to defraud members of the public, including an individual who used his family and friends to refer his ‘services’ to others, and a car dealer who exploited his knowledge of the motor industry and customer relationships to deceive clients into purchasing fraudulent policies.

Officers also came across people in their early twenties targeting their peers through sophisticated social media campaigns. This follows on from a case investigated by the unit earlier this year, in which two men aged 21 and 25 pleaded guilty to acting as unauthorised brokers after fraudulently selling motor insurance policies via social media to young people. The pair established themselves on social media as insurance brokers, claiming to have inside links to some of the UK’s biggest insurers and offering tantalising deals to youngsters in exchange for ‘administrative’ fees ranging from £50 to £400.

Example of a 'ghost broker' on social media

What is ‘ghost broking’?

‘Ghost broking’ is the name given to a tactic used by fraudsters who sell fake car insurance by a number of different methods. Fraudsters mainly target drivers, offering cheaper insurance premiums, usually via social media or by word-of-mouth. These individuals or groups pose as middlemen for well-known insurance companies, claiming they can offer you legitimate car insurance at a significantly cheaper price.

This type of fraud is typically carried out either by forging insurance documents, falsifying your details to bring the price down, or by taking out a genuine policy for you but cancelling it soon after. Whichever method is used, most victims do not realise that they do not have genuine cover until they are stopped by police or try to make a claim.

Why are young people targeted? 

Young people, and especially students, are often vulnerable to approaches from ‘ghost brokers’. 

Money is typically tight for students whilst completing their studies, and, coupled with the high insurance premiums they face, cheap offers are hard to resist. These factors combined, unfortunately, make prime targets for ‘ghost brokers’.

On top of this, some young people may not yet have a complete understanding of the insurance industry and how to insure their car legitimately, due to lack of experience. 

IFED are therefore encouraging young people to be wary of heavily discounted prices on the internet or cheap prices they are offered directly for car insurance, as they may well be offers from ‘ghost brokers’.

How to protect yourself from ‘ghost brokers’

‘Ghost brokers’ often advertise on student websites or money-saving forums, university notice boards and marketplace websites such as Gumtree. They may also try to sell insurance policies to you through adverts in pubs, clubs or bars, newsagents and car repair shops.

Be wary of brokers using only mobile phone or email as a way of contact. Ghost brokers have even been reported using messaging apps, including WhatsApp, Snapchat and Facebook. Fraudsters do not want to be traced after they have taken money from their victims.

If a deal seems too good to be true, then it probably is. If you are not sure about the broker, check on the Financial Conduct Authority or the British Insurance Brokers’ Association website for a list of all authorised insurance brokers. You can also contact the insurance company directly to verify the broker’s details.

You can check to see if a car appears to be insured on the Motor Insurance Database website.

If you think that you have been a victim of a ghost broker, you can report your concerns to Action Fraud at actionfraud.police.uk or on 0300 123 2040.