Young drivers increasing target of this insurance scam with cases jumping 50% in two years

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Young drivers have become a huge target for fraudsters attempting to scam them out of thousands of pounds with the promise of cheaper motor insurance.

With 17 to 19-year-olds facing premiums almost three times the UK average and motorists between 20 and 29 typically paying double, these drivers have become prey for scam artists pedalling fake car insurance policies.

The Insurance Fraud Bureau (IFB) says it has detected a 50 per cent jump in 'ghost broker' activity in the last two years as it urges caution to younger motorists who might be tempted by offers of cut-price cover.

Ghost brokers impersonate car insurance brokers on social media platforms such as Instagram and TikTok wanting to make contact via messaging services like WhatsApp with the promise of significantly cheaper cover than they would be quoted by genuine insurers.

The IFB says it can have 'devastating' impact on those falling foul of the scam, with victims left thousands of pounds out of pocket, having their identities stolen and vehicles seized, and potentially facing criminal consequences for driving uninsured.

To make young people more aware of this fraudulent activity, it has listed four major red flags they need to watch out for. 

Young drivers have become an increasing target for fraudsters using social media to scam them out of thousands of pounds

The IFB says in 2022 it detected 320 intelligence networks relating to ghost broker activities.

This grew to 435 in 2023 and 485 during 2024 - a 52 per cent increase on two years previous.

Ghost brokers go to extreme lengths to masquerade as genuine insurance brokers presenting what look like legitimate policies at far lower prices. 

These criminals alter policy details to make them appear less expensive. 

Sometimes it is only when drivers try to make a claim that they realise the policy is not valid.

This type of criminal activity commonly preys on younger drivers who are typically more trusting of social media.

A YouGov survey commissioned by the IFB and carried out among more than 2,000 people across the UK in May 2024 found that nearly a fifth of 18 to 24-year-olds have used social media to search for car insurance. 

A poll by Aviva last year - surveying 2,000 drivers under 25 - also found 30 per cent admitted to buying invalid or fake car insurance from someone on social media. 

Younger motorists are also likely to be less financially savvy while also facing the steepest insurance costs.

Money Supermarket's latest report for the first quarter of the year says the average premium paid across all motorists was £539.41.

However, for youngest on the road (17 to 19-year-olds) are forking out almost three times that amount at £1408.98 a year.

For drivers aged 20 to 29, the average price paid in the first three months of the year was £1091.13 - almost twice the national average. 

Criminals may try to lure people by offering cheap upfront quotes, despite insurance prices being based on the risk of the individual.

Policies are taken out using stolen details which belong to people who are cheaper to insure and sold on at an artificially reduced rate, or they may simply be copied on to a piece of paper.

Ghost brokers may also do further damage to their victims by stealing their personal information to use in other crimes, such as banking fraud.

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To help protect young drivers, the Association of British Insurers (ABI), the City of London Police and the IFB, in association with the Government's Stop! Think Fraud campaign, have launched a drive to raise awareness of the signs of ghost broking.

Ursula Jallow, IFB director, said: 'New drivers are caught out by ghost brokers because they face higher premiums and have had less experience in purchasing insurance policies for themselves, which unfortunately means they are more likely to be attracted to car insurance deals that are too good to be true.

'The impact is devastating. We've seen victims lose thousands of pounds, have their identities stolen, their confidence and self-esteem shattered, and, in some cases, they have even had their car seized for driving uninsured.

'It's really important that we spread the word to help protect young drivers from ghost brokers.'

Around 115,000 fraudulent motor insurance policies were detected by the IFB in partnership with the insurance industry between 2023 and 2024, with ghost brokers believed to be responsible for thousands of these cases.

Ghost brokers impersonate car insurance brokers on social media platforms such as Instagram and TikTok

Fraud minister Lord Hanson said: 'Young people especially need to be aware that the scammers are deliberately targeting them through their social media feeds with attractive and authentic-looking offers which will leave them ripped off and driving uninsured.'

Detective chief inspector Nik Jethwa, from the City of London Police's Insurance Fraud Enforcement Department, added: 'Always be cautious when buying insurance. 

'Ask yourself: is the insurance broker you are dealing with really who they say they are? 

'If you aren't sure, check the lists of authorised brokers at the Financial Conduct Authority and British Insurance Brokers' Association websites.'

Ghost broker red flags

The IFB has listed four key red flags that typically giveaway a ghost broker. These are:

Consumers should conduct background checks with the FCA to avoid scam insurance brokers selling their services on social media 

1. The policy may be unrealistically cheap, with an upfront quote.

2. The seller only wants to communicate in private direct messages on social media or WhatsApp. Messages can often include bad spelling and typically provide vague details.

3. The advert may look unprofessional.

4. The seller may not have a legitimate website, UK landline number or address.

If drivers experience any of these, there are ways to check the legitimacy of those offering cheap cover. You can then: 

1. Check the insurance broker is registered with the British Insurance Brokers' Association.

2. If dealing with an insurer, check they are a member of the Motor Insurers' Bureau.

3. Whether broker or insurer, check they are registered with the Financial Conduct Authority. 

Anyone who thinks they have been a victim of ghost broking or other fraud can report their concerns to CheatLine or by calling 0800 422 0421.