Ghost broking is the sale of fake or invalid insurance by people posing as legitimate brokers. The UK’s financial regulator, the Financial Conduct Authority (FCA), has been running a public warning about it, aimed especially at young drivers. This guide summarises what the FCA says about how the scam works, the signs to look for and the checks that expose it. The FCA’s guidance applies across the UK, and driving uninsured is a criminal offence in the UK.
What ghost broking is
The FCA describes ghost brokers as criminals posing as legitimate insurance brokers, who sell fake or invalid policies, often for cars, at seemingly cheap prices. According to its May 2026 press release, the policies are either entirely fake, invalid because details have been falsified to bring the price down, or cancelled shortly after purchase. The regulator adds that these fraudsters often use social media to target young drivers and produce fake documents that look very similar to the real thing. They often ask buyers to use messaging apps such as WhatsApp, and once payment is made they disappear.
Why young drivers are the focus
The FCA’s press release of 20 May 2026 reports a survey by Kantar, carried out between 24 April and 1 May 2026 among 1,000 UK drivers aged 17 to 25. It found that:
- 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.
The same release says the Insurance Fraud Bureau found a 52% increase in ghost broking activity from 2022 to 2024, and that Aviva saw a 22% surge in cases since 2023. These are survey and industry figures rather than official crime statistics, so they indicate a trend and not an exact count.
Warning signs listed by the FCA
- Not on the FCA Firm Checker. The broker or insurer does not appear in the regulator’s register.
- Social media and messaging apps. Scammers mainly use WhatsApp, Snapchat, Facebook Messenger or Instagram rather than professional email or landline numbers.
- No professional presence. There is no legitimate website, physical office address or UK landline.
- A quick sell. Artificial urgency is used to pressure the buyer.
- Too-good-to-be-true prices. The cost is often significantly lower than quotes from mainstream insurers.
- Unusual payment methods. Direct bank transfer, cryptocurrency or cash rather than secure, established payment systems.
- Upfront fees. An upfront flat fee is charged for the service.
How to check a broker and a policy
The FCA advises searching its Firm Checker to confirm the business is authorised and has permission for the service being offered. It also says to contact the firm only through the contact details listed on the Firm Checker, so that a copycat cannot be substituted. Firms that are not authorised do not give the buyer access to the Financial Services Compensation Scheme (FSCS) if something goes wrong, or the Financial Ombudsman Service if the buyer wants to complain.
Three further checks follow from the FCA’s guidance:
- Read the policy documents and confirm that the name, address, contact details and the details of the vehicle are correct.
- For car insurance, check the Motor Insurance Database to confirm the vehicle is listed.
- Be wary of deals that are only available through social media and messaging platforms, since genuine sellers should have a website, phone number and address.
The consequences of fake cover
The FCA says a driver caught with fake insurance could see the car seized and crushed by the police, face penalties of up to £300, and potentially face court and a driving ban. After an accident, the driver may also have to cover the costs of any injuries or damage caused. Its press release adds that driving without valid insurance is a criminal offence in the UK and can result in a fixed penalty, points on a licence or disqualification. The FCA also warns that contact with these fraudsters can lead to identity theft.
A related scam: fake warranty offers
The FCA’s page on insurance and warranty scams explains that warranties are technically insurance contracts, and that arranging insurance is a regulated activity, so the company offering one must be authorised. Fraudsters may make unexpected contact soon after a purchase or the start of a new contract, claim to be linked to the retailer or provider, or advertise cheaper cover on social media and forums. The buyer may receive fake documents and find out only when a claim is rejected. The same Firm Checker step applies.
If the policy turns out to be fake
The FCA advises anyone worried about a potential scam to call it on 0800 111 6768 or use its contact form. A victim who has lost money should contact Report Fraud and then report the matter to the FCA. If a ghost broker is involved, the FCA points to the Insurance Fraud Bureau’s Cheatline. The regulator says it cannot help recover money, but that it looks into every report it receives and that reports may help protect others.
Frequently asked questions
Is a cheap quote on Instagram always a scam?
Not every social media seller is a fraudster, but the FCA advises avoiding deals available only through social media and messaging platforms and checking the seller against the Firm Checker first.
The bottom line
Ghost broking works because a cheap quote is tempting and the paperwork can look real. The FCA’s advice comes down to a small number of checks made before paying: confirm the firm on the Firm Checker, use only the contact details listed there, avoid deals that exist only on messaging apps, avoid cash, transfer or crypto payment, and confirm the vehicle on the Motor Insurance Database. Anyone who has already paid should report the matter to Report Fraud, the FCA and the Insurance Fraud Bureau.