30% of young drivers have bought car insurance from ghost brokers

Our recent research reveals that young people are being targeted by ghost brokers. The research was conducted to highlight the issue of ghost broking, where fraudsters pose as legitimate insurance companies, illegally selling fake or invalid insurance to young drivers and motorists who find it difficult to buy insurance; it also shows that those who purchased cover via social media almost certainly dealt with a ghost broker and likely bought worthless insurance. This puts them at risk of having their car seized, facing an unlimited fine and receiving a driving ban.

After surveying over 2,000 drivers aged between 17 and 25¹, this is what we learnt:

• 30% of young drivers have purchased car insurance from someone operating illegally on social media platforms by selling invalid or fake car insurance, a scam known as ghost broking.
• 89% of young drivers who bought insurance on social media experienced serious consequences, including just over one in six (17%) who said they were stopped by police for driving without insurance.
• Nearly four out of five (77%) young drivers report seeing social posts advertising cheap car insurance.
  
  

The types of problems identified by young drivers:

• Of those young drivers who purchased car insurance via social media, 89% had serious problems with their policy
• 49% said their details such as their age or address were misrepresented on the policy, meaning it wasn't valid.
• 22% said they made a claim which was declined because they weren’t properly insured.
• 21% said the seller didn't help them when they raised concerns.
• 17% said the police stopped them and impounded their vehicle or issued a fine for driving without adequate insurance.

Why would young drivers consider buying car insurance on social media?*

• If a known insurance brand is mentioned, they would trust it - 39%
• They know someone who has done this already - 23%
• They make a lot of purchases on social media - 20%
• They can't see any reason not to buy insurance on social media - 19%
• If a celebrity/influencer was endorsing, they would trust them - 19%
• They can't afford the quotes they've received elsewhere - 15%

^{* Respondents could select all that applied to them. Seen by respondents that would consider buying car insurance from someone on social media}

How do young drivers feel about seeing car insurance on social media?

Once on social media, young drivers are seized upon by ghost brokers, with nearly four out of five young drivers (77%) reporting that they've seen a social post advertising cheap car insurance.

• Young drivers are split on how trustworthy those individuals are, with 48% saying the people approaching them with offers of cheap insurance are trustworthy and 48% saying they aren't trustworthy.
• That said, 63% agree they “would be suspicious of anyone offering cheap car insurance on social media,” while only 15% said they wouldn't be suspicious.

Combatting fraud

Our fraud and ghost broking data supports the young driver research. We’ve detected 340,000 policy applications with fraud concerns so far this year – and have stopped or removed a further 17,000 policies due to fraud. In addition to this, we've also linked 7,000 cases this year to open investigations into known ghost-broking cases.

Katriona Cunningham, Policy Application Fraud Lead at Aviva, said,

“Young drivers aged 17–25 are the first generation to grow up with social media being an integral part of their daily lives. It is understandable, then, that when looking for car insurance, 30% of young drivers said they turn to social media. However, ghost brokers are actively targeting young drivers on social media platforms, offering cheap-but-worthless car insurance that puts the young driver at risk of being uninsured. I would say to all young drivers, if a deal looks too good to be true, it probably is. If you engage with someone offering cheap insurance on a social media site, they are probably fraudsters. Avoid anyone offering access to cheap car insurance via social media. If you suspect you’ve encountered a ghost broker, report it to the Insurance Fraud Bureau or Action Fraud so they can investigate and prevent others from being scammed.”

Aviva has the following tips to ensure a policy is legitimate:

• Too good to be true? It probably is. Beware of super cheap deals.
• Verify the broker - check BIBA and FCA registrations.
• Check the insurer - make sure they’re in the Motor Insurers’ Bureau.
• Avoid social media deals - legitimate brokers don’t operate solely on TikTok or Snapchat.
• Spot red flags - watch out for bad spelling, vague details and messaging app requests.
• Do your research - contact insurers directly and check the Financial Services Register.
• Report suspicious activity - suspect ghost broking? Report it to the IFB’s CheatLine.

^{1 The research was conducted by Censuswide with 2,000 drivers aged 17-25, between 9.10.2024 - 14.10.2024. Censuswide abide by and employ members of the Market Research Society which is based on the ESOMAR principles and are members of The British Polling Council.}