Ghost broker car insurance scam: how young drivers can avoid £5k fines

If you’re a young driver looking for a bargain on car insurance, a new warning from the Financial Conduct Authority (FCA) could save you from a devastating fine — and a criminal record.

Nearly half of drivers aged 17 to 25 are buying car insurance through social media and messaging apps like Instagram, Facebook, Snapchat and WhatsApp, according to recent FCA research. The problem is, many of these policies don’t actually exist. Fraudsters known as “ghost brokers” are exploiting financially stretched young drivers by offering premiums that look too good to be true — because they are.

Here’s what’s happening. These scammers either invent fake policies entirely, or they tamper with real insurance applications by changing details like your address, job or driving history to artificially lower the price. They take your money, and sometimes the cover is cancelled within days without you knowing. You only find out you’re uninsured when police pull you over or after an accident.

And the consequences are serious. Driving without valid insurance is a criminal offence. You could face fixed penalties, points on your licence, vehicle confiscation, and potentially a driving ban. Fines can reach £5,000.

Why are young drivers particularly at risk? One in seven admitted they struggle to afford insurance premiums. Financial pressure makes cheap offers tempting — and scammers know it. Four in ten young drivers also lack confidence spotting a fake policy.

The FCA has reported a 52 per cent increase in ghost broking incidents between 2022 and 2024. Insurer Aviva found cases jumped 22 per cent since 2023 alone.

So how do you stay safe? Before buying any car insurance, use the FCA’s free Firm Checker tool to verify the company is authorised and that contact details match the regulator’s register. Legitimate providers always have a proper website, phone number and business address. If an offer is only available on social media or messaging apps, walk away.

As Graeme Reynolds, the FCA’s director of insurance, puts it: “Don’t get ghosted by a policy that doesn’t exist.”

Check the FCA Firm Checker at register.fca.org.uk before you buy. It takes two minutes and could protect you from thousands in fines and a criminal conviction.