A first car insurance quote can be a shock, and that is exactly when a cheap offer on social media looks tempting. This guide is for new drivers and their parents across the UK. It explains what ghost brokers are, the warning signs, how to check that a broker or insurer is genuine, what happens if you drive on a fake or invalid policy, and where to report it.
What a ghost broker is
UK-wide: the Financial Conduct Authority (FCA) describes ghost brokers as criminals posing as legitimate insurance brokers, selling fake or invalid policies, often for cars, at prices that look cheap. The Association of British Insurers (ABI) says ghost broking covers a range of tactics, including:
- forging insurance documents
- falsifying your details to lower the premium
- taking out genuine policies and then cancelling them
The FCA’s May 2026 warning puts it the same way: the policies are either entirely fake, invalid because details were falsified to bring the price down, or cancelled shortly after purchase. In every case, the driver ends up uninsured, often without knowing it. The ABI says many victims only find out when they are stopped by the police or try to make a claim.
Why young drivers are targeted
On 20 May 2026 the FCA warned drivers aged 17 to 25 about ghost broking on social media and messaging platforms. It published survey results from Kantar, carried out between 24 April and 1 May 2026 among 1,000 UK drivers aged 17 to 25:
- 49% had bought insurance through social media or messaging apps
- 39% were not confident in spotting the signs of a fake policy
- 45% said they generally trust products or services bought through social media
- 15% said they find it difficult to fit insurance into their monthly budget
In the same release, the FCA reported that the Insurance Fraud Bureau (IFB) found a 52% increase in ghost broking activity from 2022 to 2024.
Warning signs to look out for
The FCA and ABI list these warning signs, which apply across the UK. One on its own should make you stop and check; several together are a strong signal to walk away.
- Not on the FCA Firm Checker: the broker or insurer is not listed.
- Social media and messaging apps: contact is mainly through WhatsApp, Snapchat, Facebook Messenger or Instagram rather than professional channels.
- No professional presence: no proper company website, office address or UK landline number.
- Free email or mobile only: the ABI warns about “brokers” whose main contact is a mobile number, a messaging app, or a Gmail, Yahoo, Outlook or Hotmail address.
- Pressure to buy quickly: artificial urgency to stop you thinking it through.
- Too good to be true: a price much lower than quotes from mainstream insurers.
- Unusual payment methods: bank transfer, cryptocurrency or cash rather than established payment systems.
- Upfront fees: a flat fee charged up front for the “service”.
How to check a broker or insurer is genuine
These checks work anywhere in the UK and take a few minutes:
- Use the FCA Firm Checker. The FCA says its Firm Checker tells you whether a firm is authorised and has permission to sell you the product. The Financial Services Register holds more detail, including individuals and a firm’s history. If a firm shows as “No longer authorised” or “Revoked”, avoid it.
- Contact the firm using the details on the Firm Checker. Some scams are clone firms that copy a genuine authorised firm. The FCA says to make sure the contact details you have been given match those on the Firm Checker.
- Search the FCA Warning List. It lists unauthorised firms the FCA is concerned about. The FCA warns that a firm missing from the list may still be unauthorised, because these firms often change their names.
- Ask the insurer directly. The ABI suggests contacting the insurance company to verify a broker’s details.
- Check the policy details. The FCA says to check that your name, address, contact details and vehicle details on the policy are correct. Ghost brokers sometimes falsify details to cut the price, which can leave the policy invalid.
- Check your car is on the Motor Insurance Database. GOV.UK and the FCA both point to askMID for checking whether a vehicle is insured.
If you are unsure, the FCA’s consumer helpline is 0800 111 6768. Dealing with an unauthorised firm also means no access to the Financial Ombudsman Service if you want to complain, and no Financial Services Compensation Scheme protection if it goes out of business.
What happens if you drive on a fake or invalid policy
Great Britain: GOV.UK says it is illegal to drive on a road or in a public place without at least third-party insurance, and that even if a vehicle is insured, you can be penalised if you are not correctly insured to drive it. The police can give a fixed penalty of £300 and 6 penalty points. If the case goes to court, you could get an unlimited fine and be disqualified, and the police can seize, and in some cases destroy, the vehicle. Annex 5 of the Highway Code lists driving without insurance at 6 to 8 penalty points.
New drivers (UK-wide): in both Great Britain and Northern Ireland, a driver who reaches 6 or more penalty points within two years of passing their first test loses their licence and has to retest. In Great Britain, the 6 points from a single no-insurance fixed penalty are enough on their own.
Northern Ireland: nidirect says you must have motor insurance before you can drive your vehicle in a public place. The FCA’s warning describes driving without valid insurance as a criminal offence in the UK.
The cost does not stop at penalties. The FCA warns that if you have an accident, you could have to cover the costs of injuries or damage yourself, and that contact with fraudsters can lead to identity theft. The documents topic of the theory test covers the insurance rules every driver needs to know.
How to report it
- If you have lost money (England, Wales and Northern Ireland): report it to Report Fraud at reportfraud.police.uk. Report Fraud is the national reporting service that replaced Action Fraud, and the FCA updated its guidance in March 2026 to point to it. Report Fraud says people in Scotland should report via 101.
- Tell the FCA: the FCA asks people who have lost money to a scam to report it to the FCA as well. It says it cannot get your money back, but it looks into every report.
- Ghost broking information: both the FCA and the ABI say to contact the Insurance Fraud Bureau through its Cheatline if the incident involves a ghost broker.
- If you paid by bank transfer: the FCA says that if you sent money to a fraudster on or after 7 October 2024, you may be covered by protections introduced by the Payment Systems Regulator. Ask your bank what applies to your payment.
Frequently asked
I did not know the policy was fake. Can I still be penalised? The FCA says ghost broking victims are left unknowingly uninsured and at risk of prosecution, fines and having their car seized. Being deceived does not turn a fake policy into real cover.
How can I check my car is insured? Use askMID, the Motor Insurance Database check. GOV.UK and the FCA both recommend it.
What to remember
Ghost brokers rely on new drivers being short of money and short of time. A price far below mainstream quotes, contact only through messaging apps and pressure to pay by bank transfer are the classic signs. Check every broker and insurer on the FCA Firm Checker, contact them through the details listed there, and confirm your car appears on askMID before you drive.
This is general information, not legal advice.
Sources
- Financial Conduct Authority, “Insurance and warranty scams” (fca.org.uk)
- Financial Conduct Authority, “Young drivers warned about fake insurance sold on social media” (fca.org.uk)
- Financial Conduct Authority, “How to check a firm or individual is authorised” (fca.org.uk)
- Financial Conduct Authority, “FCA Warning List of unauthorised firms” (fca.org.uk)
- Association of British Insurers, “Ghost broking” (abi.org.uk)
- Report Fraud, “UK’s Home for Reporting Cyber Crime & Fraud” (reportfraud.police.uk)
- GOV.UK, “Vehicle insurance” (gov.uk)
- GOV.UK, “The Highway Code: Annex 5. Penalties” (gov.uk)
- nidirect, “Motor insurance explained” (nidirect.gov.uk)
- nidirect, “New drivers” (nidirect.gov.uk)