Watch Out for the Online Car Insurance Scam Called Ghost Broking

Philip Bates 18-06-2019

So-called “ghost broker” extortion is on the rise, typically using social media to scam motorists into buying fraudulent insurance. This practice leaves you out of pocket and driving around illegally. Besides costing you a lot of money, it can have serious long-term consequences, including landing you with a criminal record.


But “ghost broking” is an umbrella term which covers a number of scams used by cybercriminals. So what exactly is ghost broking? Who is most at risk? And how can you prevent being a victim of car insurance fraud?

What Is Ghost Broking?

There are three main ways this scam works, but all involve the fraudster pretending to act as an intermediary between you and a car insurance company. The result is that you are left without proper insurance on your vehicle.

parked vehicle driveway

Two methods involve the cybercriminal actually taking out policies in your name with a genuine insurer. However, they may input falsified details in order to get cheap premiums for vehicles or drivers who might otherwise demand high rates. Documents can then be doctored to appear authentic. It still means victims’ cars are improperly insured.

They could also take out an accurate policy, but once you’ve paid for it, the fraudster could cancel it and keep the refund for themselves.


The other practice involves forgery, bypassing the insurance company entirely and creating a fake policy.

In all these instances, you might further be charged fees for supposed brokerage services.

What Risks Do Victims Take?

What are the consequences of buying from a fraudster? It depends on local law enforcers, but at the very least, victims will have to pay out again on proper insurance.

According to your jurisdiction, however, you also risk:

  • A fixed penalty for not having an insured vehicle
  • Seizure of your car
  • Points on your license

If you’re unfortunate enough to be involved in an accident, you’re liable to pay for all repairs.

Not only will you be a victim of fraud—and trust us, it’s an awful feeling How I Nearly Got Conned Via A Western Union Transfer Scam Here's a little story about the latest "Nigerian scam", which is all too obvious in hindsight and yet so believable when you're on the hook. Read More —but you’ll further lose a lot of money to the scam.

Most worryingly, you won’t be aware that you’re driving an illegal vehicle until it’s too late. The fact will only become apparent when you try to make a claim, or the authorities stop you.

Who Is Most at Risk of Ghost Broking?

Car insurance premiums increase an eye-watering amount each year, so it’s only natural we try to get a better deal.


It’s no great surprise, then, that those between the ages 17 and 24 are most likely to fall for such a scam. After all, this is the demographic generally hit hardest by insurers. Companies judge inexperienced drivers to be more likely to be involved in a collision. However, high fees from well-known insurers also force youngsters to search for cheaper rates from unfamiliar brokers.

As such, cybercriminals advertise on student forums, marketplaces on social networks like Facebook, and messaging apps.

But your age doesn’t matter too much. If you’re looking for car insurance, you can fall victim.


How to Spot Ghost Brokers

Keep an eye out for the usual mistakes made by cybercriminals like bad spelling, grammar, and punctuation. However, you can’t rely solely on these. Ghost brokers are generally experienced at doing this, so might not slip up so easily.

Google is your friend. If you think you’ve found a great deal at a reputable company, check for any online presence, including customer reviews. These can be faked, so don’t base your decision on one source. Search for them on social media. They may not have a Facebook page, but if they’re a decent firm, or indeed if they’ve scammed others before, people will be talking about them.

And if a supposed broker is keen for you to pay using cash or bank transfer, just don’t. No respectful firm does this. It’s a scam.

Those tips are true of all purchases, but there are a couple of factors common to ghost broking that you need to be wary of.

Firstly, steer clear of any listings that simply show basic contact details like a location and name alongside promises of huge savings. This might seem obvious, but many fall for this when engaging with marketplace ads, forums, and WhatsApp. Brush up on how to spot social network fraud 5 Ways To Spot Social Media Scams & Rogue Apps Facebook is a huge platform for all sorts of scams. Cleaning up after falling for one is a pain; let's take a look at some ways to identify and avoid them. Read More .

Some will only communicate via social media and are reluctant to give you a phone number. Others will only give you a mobile number or email address yet make it difficult for you to follow things up with them.

Most importantly, if someone immediately offers you insurance, that’s a clear sign it’s a scam. No insurers will do this because they need to know a wealth of information about you and your vehicle. What type of car do you own? When did you get your license? What’s your claim history?

What to Do If You Think It’s a Scam

If something doesn’t seem right, it probably isn’t.

Certainly don’t sign any documents or hand over personal information (notably financial data). Similarly, don’t give anyone physical cash, use monetary apps, or send a bank transfer.

You need to check that the agent is an actual broker, licensed to sell insurance in your state.

The National Association of Insurance Commissioners can tell you this if you live in the USA, or at least give you contact details for the relevant insurance department. If you live in the UK, check using the Financial Conduct Authority or the British Insurance Brokers.

If the broker isn’t listed, don’t follow through with the so-called “deal.” Instead, report them to the local authorities.

How to Tell You’re Insured

driving vehicle timelapse lights freeway tunnel

If you’re now worried that you’re driving around in an illegal car, you should check your insurance. You don’t want your car impounded because you can’t produce the correct papers.

In the UK, this is easy because you can enter your vehicle registration number on the Motor Insurance Database.

But in America, it’s not controlled on a national basis, making it a slightly more difficult proposition. Some states do have their own databases, so turn to your local authorities to find out.

Nonetheless, you should have insurance documents to hand, or at least know who your insurer is. Contact them and tell them you just want to check on your status. If it’s a reputable firm, they won’t mind; in fact, they should appreciate your diligence.

Don’t Be Taken for a Ride

We’re seriously tired of car insurance scams, but ghost broking remains an increasingly popular extortion method.

You shouldn’t forget the adage that if it looks too good to be true, it probably is. You’re looking for a bargain, not a miracle. And remember to be skeptical: don’t get drawn in by foolish promises of massive discounts.

Still, it’s easy to fall for scams, especially those that proliferate on popular apps like WhatsApp Is WhatsApp Safe? 5 Security Threats Users Need to Know About WhatsApp security is a challenge. It's a favorite target of scammers and hackers. Is WhatsApp safe? Here's what you need to know. Read More .

Related topics: Insurance, Online Fraud.

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  1. Andy K
    June 18, 2019 at 11:22 pm

    Phone scammers should have they're entire family shot. Doesn't matter why they do it, doesn't matter if they're poor and can't do anything else. Entire family shot.

    • Sam C
      September 30, 2019 at 10:36 am

      So lets say I have a brother who unknowingly to me does something illegal and I am an honest upstanding citizen you say I should be shot?