Executives warned over terrifying ‘ghost broker’ scam that has affected 50,000 Britons in the past year – what should you watch out for?

DRIVERS have been warned about the terrifying ‘ghost broker’ scam that has affected 50,000 Britons in the past year.

Motorists can unknowingly spend thousands of euros on criminal gangs, while inadvertently breaking the law themselves.

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With insurance premiums at an all-time high, it’s always a good idea to shop around to find the best deal.

But if you come across a rate that seems too good to be true, it could indicate malicious intent.

Also known as ‘ghost broking’, this crime is a form of insurance fraud that aims to defraud car owners with fake advertisements.

All recognised insurers are regulated by the Financial Conduct Authority (FCA), the UK’s financial services watchdog.

But the Insurance Fraud Bureau (IFB) reports a significant increase in the number of unregulated insurance providers.

They are also called ‘ghost brokers’ because they do not officially exist. They often target people who have difficulty finding cheap insurance and lure them with unbelievable rates.

They then convince the drivers to take out insurance that is in fact not valid.

Others simply take the money and run, without even bothering to provide false policy documents.

Nicola Smith, Intelligence & Investigations Manager at the IFB, urged motorists to be careful and only choose insurers they know are reliable.

The fraud expert warned that the shady traders are sometimes almost indistinguishable from the real ones.

She told AutoExpress: “A ghost broker is a person who pretends to be an insurance broker but is not authorised by the Financial Conduct Authority to provide such services.

“They are usually active on social media, Facebook or Instagram and often target younger people, whose real insurance policies would likely cost a significant amount.

“They can still overcharge the customer, but in effect the policy is invalid because the information provided is incorrect.

“The ghost broker may have used a different email address so the victim never received anything.

“And if they’re naive about how insurance legitimately works, they might not realize this is a problem.”

Data from the IFB shows that 50,000 Britons will have fallen victim to estate agent scams in 2023 alone, a 6% increase on the previous year.

To protect yourself from scammers, experts recommend sticking with reputable providers if possible.

If you find a better deal, ask a trusted provider to match it. They often will.

If you do decide to do business with an insurer you don’t know, check whether it is regulated by the FCA.

A full list can be found on the websites of both the FCA and the Bank of England.