Ghost brokers, how to spot fake car insurance before you pay

A message arrives in a community group. Car insurance, half the price of every comparison site, paid by bank transfer to a named person, documents sent as a screenshot. It looks like a bargain. It is often a crime.

In the twelve months to September, 596 suspected organised ghost broking networks were reported to the Insurance Fraud Bureau, at least one new network every day, as Insurance Today reported on 26 October. The bureau has launched a multilingual campaign with the ABI, the CII, the City of London Police and the FCA. Police figures quoted in the same report put 39 per cent of cases in Greater London, with Greater Manchester next at 13 per cent.

The second number is the one that worries me. According to CII research reported by Insurance Edge, around one in ten adults who bought motor insurance in the past three years paid an individual rather than a company. Among buyers aged 18 to 30 that rose to 24 per cent, and 19 per cent of that group had received policy documents as a photo, screenshot or message, against 6 per cent of all buyers.

Here is the detail worth sitting with. A ghost broker does not need to fool an insurer. They only need to fool you until the money has gone. The fake or doctored policy often surfaces only when a car is stopped or a claim is made, and by then the vehicle can be seized and the driver is uninsured.

If the price is far below every other quote and the payment goes to a person, stop. Check that the firm appears on the FCA register, pay the insurer or broker directly, and expect proper documents, not a picture on your phone.

A real policy can be checked, so check it before you pay.