FCA warns young drivers over rise in ‘ghost broking’ scams

Young drivers are being urged to stay alert to a surge in fake car insurance scams, as new warnings highlight how fraudsters are exploiting social media to sell fake policies.

The Financial Conduct Authority (FCA) says so‑called ’ghost brokers‘ are increasingly targeting younger motorists with cheap insurance deals that appear legitimate but often leave drivers uninsured and at serious risk. The warning follows growing concern across the industry. Shockingly, data from the Insurance Fraud Bureau indicates a 52% increase in ghost broking activity between 2022 and 2024.

A survey of 1,000 UK drivers aged 17–25, conducted from 24 April to 1 May 2026 found that nearly half of young drivers have bought insurance through social media or messaging apps, with 39% admitting they would struggle to spot a fake policy. At the same time, trust in these platforms remains high among young people, making it easier for scammers to operate.

Behind the headlines is a clear pattern: rising living costs are pushing drivers to look for cheaper cover, and fraudsters are stepping in to fill that gap with offers that seem too good to ignore. Yet, as Graeme Reynolds, Director of Insurance at the FCA stated, “driving uninsured could cost you far more than any premium.”

What is “ghost broking”?

Ghost broking is a type of insurance fraud where criminals pose as legitimate brokers and sell fake or misleading motor insurance policies to unsuspecting drivers.

They typically promote deals through platforms such as Instagram, Snapchat, TikTok, Facebook Marketplace and WhatsApp, often targeting younger or first‑time drivers who may be unfamiliar with how insurance works. These scams can take several forms, including:  

• Creating entirely fake insurance documents that appear legitimate
• Purchasing genuine policies using false details to lower the price
• Editing legitimate policy documents
• Cancelling policies shortly after payment is made
• Impersonating authorised brokers or insurers

The common thread is that the victim believes they are covered when they are not. Low prices are a key part of the trap. The same survey suggests 1 in 7 young drivers struggle to fit insurance costs into their monthly spending. As such, with many young drivers already struggling to afford premiums, the appeal of a bargain can make these offers hard to resist.

Why young drivers are being targeted

Young motorists are particularly vulnerable to ghost broking scams for a few reasons.

Insurance premiums tend to be higher for this group, making cheaper deals more appealing. At the same time, many younger drivers are more likely to buy products through social media or messaging apps, where these scams are commonly promoted.

The consequences of fake insurance

The risks go far beyond losing money.

If you’re caught out by a ghost broking scam, you could be unknowingly driving without valid insurance, which is a criminal offence in the UK. Even if a policy looked genuine at the time of purchase, that does not count as a defence. If you were stopped by the police, the consequences can be severe. As an uninsured driver, you face penalty points on your licence, could have your vehicle seized, or be taken to court. Fines can be significant, and more serious cases can even result in disqualification from driving.

There can also be longer‑term impacts. A conviction for driving without insurance can affect future premiums, making your cover even more expensive down the line. Put simply, what looks like a cheap deal can quickly turn into a costly mistake.

How to spot and avoid ghost brokers

While these scams are becoming more sophisticated, there are clear warning signs to look out for. Young drivers should:

• Be wary of unusually cheap quotes that seem far lower than others.
• Avoid buying insurance solely through social media or messaging apps. Legitimate insurance brokers will have a proper website, a registered address and clear contact details.
• Check the company’s contact details independently before engaging.
• Don’t rush into payments, especially if you’re being pressured.
• Always ask for full policy documentation and review it carefully. If anything looks unusual or incomplete, don’t proceed.
• Use the FCA Firm Checker to verify the company is legitimate and ensure the contact details match those listed to confirm it’s genuine.

For more guidance on scam awareness, visit the FCA’s consumer protection pages.

How Howden can help

Finding the right cover doesn’t need to be complicated or risky. If you’re unsure what to trust, our team of young driver specialists can guide you through your options and find you legitimate cover tailored to your needs.

And, because we like to help, if you think your quote may be too good to be true, and could be a scam, we’ll be happy to check it for you. With clear advice, trusted insurers and no shortcuts, you can feel confident you’re properly protected from the start.

Sources: FCA, BBC, Flint Bishop

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