Dodgy companies offering car insurance that is either non-existent or missing key details across social media sites are costing the average victim £1,950.
Consumer group Which? found social media sites rife with scam car insurance "ghost brokers", leaving tens of thousands of drivers potentially uninsured on the roads.
"Ghost broking" is a scam that involves "brokers" forging insurance paperwork completely or more commonly selling victims a "real" policy at a reduced price, by changing some of the victim’s details in the application, such as their address or claims record. Ghost brokers mainly operate online, particularly on social media.
Which? searched social media platforms for profiles and pages that showed signs of being run by scammers. The consumer body analysed the first 50 pages returned from a search for "cheap car insurance" on Facebook, Instagram and TikTok.
Of the 47 profiles that matched Which?’s search on Instagram, more than half (25) appeared to be offering quotes or cover to UK drivers, while showing no signs of being authorised by the Financial Conduct Authority (FCA).
In a separate search, Which? found one Instagram profile that boasted it could save customers "up to 50%" on their premium — it also offered "NCB (no-claims bonus) Documents" and "Speeding Ticket Removal". It had 45,900 followers — more than the five biggest insurers combined — and claimed to have "over six years experience in [its] field".
On Facebook, seven pages of the 50 profiles were dubious. On video-sharing site TikTok, two of the 50 profiles analysed were suspect.
Jenny Ross, Which? money editor, said: “Ghost broking is a really nasty kind of fraud, where scammers operate by stealth and typically take advantage of those who feel locked out of, or bewildered by, the car insurance market.
“Social media sites must do much more to crack down on car insurance scammers that are infiltrating their sites and harming consumers, and should address these problems now, ahead of the Online Safety Bill becoming law.
“The Online Safety Bill should require platforms to tackle this type of fraudulent content. The government must ensure this happens by amending the Bill so that its definition of fraud does not allow some scammers to slip through the net and guaranteeing Ofcom is ready to enforce these new laws when they come into force.”
Last year insurers reported more than 21,000 policies that could be connected to the scam, according to the Insurance Fraud Bureau.
Some 517 cases of ghost broking — with losses totalling £1m — were reported to Action Fraud in 2021. Which? said the true figures are likely to be higher.
Many of these losses were from young drivers, who face the steepest premiums. Ghost brokers also heavily target non-native English speakers.
People who have not even bought a policy can also be affected by the scam through having their address or other details used as part of forged insurance paperwork.