Don't get scammed: Social media car insurance fraud doubles in a year

• 179 victims lost money to car insurance scams on social media last year – twice as many as the year before[1]
• Losses to fraudsters rose to £185,369, up from £77,351 the previous year[1], reveals a freedom of information request to Action Fraud
• The average person lost £1,036 – but losses could be greater if found to be driving without insurance, or in an accident without proper coverage
• One in ten (10%) people have tried to buy a policy via social media, with over half of these attempts (53%) being a scam or a misleading offer[2]
• Temporary insurance experts at Tempcover advises drivers to be extremely cautious when seeing car insurance offers on social media and strongly recommends verifying the legitimacy of any provider

Social media car insurance scams have doubled in 2024, leaving victims £185,369 out of pocket in just one year[1], according to Action Fraud data analysed by Tempcover, the temporary car insurance service.

Action Fraud received 179 reports of social media car insurance scams in 2024, but the actual number of victims is likely far greater. Many people who have been defrauded don’t realise that they have been tricked, and drive their vehicle unaware that they aren’t covered. Losses increased from £77,351 in 2023 alone, when 90 people alerted the police[1]. 

A ghost broker is an individual or company that sells fake or invalid insurance policies, often to unsuspecting customers. These brokers typically offer cheaper premiums or fraudulent coverage, leaving the buyer without legitimate insurance when they need it most.

The average victim of Ghost Broker scams (where fraudsters sell fake or invalid insurance policies) last year was aged 33 and lost £1,036, contributing to a total loss of £185,369, with many signing up for ongoing monthly payments.[1]

Graph: Financial losses to Ghost Broker scams on social media

Source: Tempcover/Action Fraud

‘Ghost broker’ scams have risen in recent years, with fraudsters typically targeting victims on social media by selling fake insurance policies at incredibly low prices and then disappearing.

Ghost brokers employ various deceptive tactics, often leaving unsuspecting customers completely unprotected. A common tactic involves the creation of entirely fake insurance documents, including certificates and policies that mimic those of legitimate insurers.

Getting caught with fake car insurance can have devastating consequences. If stopped by the police, a person could face prosecution for driving without valid insurance, resulting in fines up to £300 and six penalty points. The car could be seized, impounded, or even crushed. In the event of an accident, the victim will be personally liable for any injuries or damage caused, and will have to pay for repairs out of pocket, compounding the loss from the fraudulent policy.

New research from Tempcover reveals one in six people (15%) say they would consider buying car insurance via social media, suggesting there is a critical need for greater education and awareness[3]. This is further highlighted by one in ten consumers (10%) having attempted to purchase a policy this way[2], with more than a tenth (11%) discovering it was a scam.[2]

Temporary car insurance experts at Tempcover are advising drivers to be extremely cautious when seeing car insurance offers on social media, and strongly recommend verifying the legitimacy of any provider. 

Jake Lambert, temporary car insurance expert at Tempcover, says: “Falling for a ghost broker scam can have devastating consequences. Victims might unknowingly be driving without valid insurance, facing fines, penalty points, or even be at risk of having their vehicle impounded. Worse still, if an accident happens, they could be left with a huge financial loss, paying for damages out of pocket, including vehicle repairs, legal fees, or even compensation for injuries.

“By staying informed and taking precautions, you can keep yourself covered and avoid unnecessary risk. Your peace of mind is worth it – if something doesn't feel right, take a step back.”

SPOT THE RED FLAGS

• Prices that seem too good to be true, often with high-pressure sales tactics
• Policies filled with errors or missing details
• Brokers mainly operating through social media and messaging apps

HOW TO PROTECT YOURSELF:

• Check credentials on the Financial Conduct Authority (FCA) website - https://register.fca.org.uk/s/ 
• Buy directly from a trusted broker's official website or app
• Verify your policy by calling the insurer directly
• Trust your instincts - if something feels off, walk away

IF YOU THINK YOU'VE BEEN SCAMMED:

• Report it to Action Fraud
• Contact your bank about the payment
• Arrange a valid insurance policy with a legitimate trusted insurer immediately 

Jake Lambert adds: "Tackling ghost brokers requires an industry-wide collaboration. That's why we work closely with the FCA to report regulatory misuse, and in serious cases, engage directly with the police and Action Fraud. We've also built formal partnerships with leading social media platforms to swiftly remove fraudulent accounts, ads and profile imitations looking to deceive our customers, helping to better protect them from fraudsters.”