Ghost Broking

What is ghost-broking, and how can I avoid it?

 With the cost of everything seemingly on the rise, you might be keen to save a few pennies here and there, and while this attitude may serve you well in the supermarket, it could cost you more than you bargained for when it comes to insurance.

The Insurance Fraud Bureau (IFB) has issued a warning for those shopping for insurance to be vigilant in the face of a scam that’s becomingly increasingly common, ghost-broking.

What is ghost-broking?

Ghost-broking involves unauthorised (and therefore unregulated) individuals or groups acting as insurance brokers, procuring invalid or fraudulent insurance policies for customers, leaving them vulnerable to financial losses and legal ramifications.

The so-called ghost-brokers prey on people searching for insurance, often offering policies at significantly lower prices than those available through legitimate brokers. Policies are then either bought from insurers using false information and then doctored to show the correct details before being sold on to the customer, or the documentation is forged from scratch with no policy ever having been taken out. 

Who do ghost-brokers target?

While anyone could become a victim of a ghost-broking scam, ghost-brokers predominantly prey on those looking to save money on their insurance. They may target people that are deemed as higher risk, such as young drivers, as they’re often more expensive to insure and therefore could be searching for a way to cut costs. Ghost-brokers often operate through social media, forums, or even in person.

What are the risks of ghost-broking?

Invalid insurance: Ghost-brokers issue policies that are often fake or have been obtained fraudulently. In the event of a claim, policyholders may find themselves without cover.  

Cancellations: Having obtained the insurance for the policyholder and received their money, ghost-brokers often cancel the insurance and pocket the refund, leaving customers uninsured without their knowledge.

Identity theft: The application process likely involves sharing sensitive personal information which may put individuals at risk of identity theft.

Legal consequences and financial losses: Using a fraudulent insurance policy can result in legal action including fines or other penalties. Plus, without cover, you’d be responsible for covering the cost of any claim.

No support when you need it: Legitimate insurance brokers provide crucial support during the claims process whereas ghost-brokers tend to vanish once the policy has been sold.

What are the consequences of driving without valid insurance?

According to, if you’re caught driving without valid insurance, which could happen if you’re a victim of ghostbroking, you may be issued a fixed penalty of £300 and 6 points on your licence. The case could also go to court which may result in an unlimited fine or being disqualified from driving. The police may also seize or destroy the vehicle.

How to avoid falling victim to ghost-broking scams

Check your broker’s credentials: Legitimate insurers brokers like Swinton are regulated and authorised by the Financial Conduct Authority. Checking this will help you to ensure you’re dealing with a reputable business.

If it seems too good to be true, it probably is: Do your research to get an idea of how much policies offering a similar level of cover tend to cost. Be cautious of any offers that seem to good to be true, particularly significantly lower premiums offered by unknown brokers.

Make sure you’re using official channels: Avoid sharing information or making purchases through social media or online forums. Opt for official websites and check for information regarding authorisation and regulation.

Read reviews: Online reviews through websites such as Trustpilot are a good indicator of a company’s reputation. Legitimate businesses often share a track record of positive customer experiences on their site.

Protect personal information: Be cautious about sharing sensitive personal information, especially with unfamiliar brokers. Legitimate brokers only request necessary information for the insurance application process and adhere to strict privacy and data protection standards.

Check policy documentation: Carefully review all policy documentation before finalizing any transaction. Look for inconsistencies, misspellings, or vague terms that may indicate a fraudulent policy.

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