After shelling out on driving lessons, waiting months for your test and taking out a loan to buy a first car, the dream of having your own transport is finally near. But there’s a stumbling block: insurance – and the quotes seem to be huge.

You are relieved when you see an ad on one of your socials that promises to cover you for just £1,000. Just a few clicks on your smartphone and you are done. After giving some details, you are emailed an insurance certificate.

However, the reality is that the certificate is fake and you are uninsured. If you are stopped by the police, you could end up in court and be banned from driving and have your car destroyed. To make matters worse, your private data is likely to be traded on the dark web.

This is “ghost broking”, where criminals pose as legitimate insurers and sell fake or invalid insurance certificates to victims. In the past, criminals would get a book of insurance certificates and sell them in person. Today, the fraud happens online through a mixture of social media ads and AI-generated websites.

The insurer Aviva says drivers aged between 17 and 25 are the main targets of the scammers. Young people often face huge insurance premiums, which average £3,100 in London, and spend significant amounts of time on social media.

The number of ghost broking frauds has been on the rise, according to Aviva. It has detected a 22% more cases this year than in 2023, with victims losing an average of £2,000. In one case, a criminal is thought to have made £150,000 by selling 550 worthless policies online.

“Typically victims understand they have fallen victim to a ghost broker in the event they’re stopped by the police, they need to make a claim, [or] they’re in a car accident,” says Kat Cunningham, the underwriting fraud lead at Aviva.

“It’s at that point where there’s a check done on the insurance and [they have] that horrible moment of ‘that really good deal … actually I’ve got no insurance in place’.”

What the scam looks like

A social media ad will promise insurance for a fraction of the cost of what is available on the legitimate market. In one case, a 23-year-old was “quoted” £586 a year for cover on an Audi A3. The ad directs people to a site that could look like a legitimate insurance company or have the name of a fake firm.

They are asked for their personal details – name, age, address, experience of driving – either on the site or through a messaging app. They are often then asked to pay for the insurance by bank transfer.

The fraudsters posing as a broker may charge a fee for their services – this is typically a few hundred pounds.

According to Cunningham, the criminals will then do one of two things. They could email a fake insurance certificate to the victim. Or they could contact an insurance company and buy a policy – but they will change the age and occupation of the driver to get a cheap quote. They will pay for it and then send an altered copy of the real certificate to the victim. The criminal pockets the fee and the difference between what they have charged the victim and the cost of the policy.

What to do

Be alert to anyone claiming to sell insurance on social media, especially if they are offering cheap cover and you are a young driver. While legitimate brokers may advertise this way, they will always direct drivers to their legitimate website to buy a policy.

Only buy insurance from brokers that are registered with the Financial Conduct Authority – you can search on its website.

If you do feel that you have been the victim of ghost broking, you can contact the Insurance Fraud Bureau’s CheatLine or by calling 0800 422 0421. You can also contact the national fraud reporting centre, Action Fraud.

If you are worried about your insurance cover, contact the company that you believe you have cover with and it will be able to tell you what information it holds on you.