Almost half of drivers in Northern Ireland admit they could not identify a ghost broking scam, even as fraudulent insurance activity rises sharply across the UK, according to new research from car insurance comparison site CompareNI.com.
A survey of 700 motorists found that while two-thirds are aware that ghost brokers sell fake policies, just 49% are confident they could recognise one. Some 44% said they are worried about being duped into buying fraudulent cover, and 96% felt that high insurance costs were making drivers more vulnerable to these scams.
Their concern is well-founded. The Insurance Fraud Bureau recorded a 52% increase in detected ghost broking activity between 2022 and 2024. Action Fraud received 817 reports of ghost broking in 2024, a 24% increase on the previous year, with the average victim losing £2,207.
Young drivers in Northern Ireland face some of the steepest premiums in the UK, making them particularly susceptible to the lure of cheaper, fraudulent policies.
Northern Ireland ranked second in the UK for young driver insurance costs in Q4 2024, with average premiums for that age group reaching £1,470, just £8 below London. In Belfast, 18-year-olds face average premiums of more than £3,150, the highest in the UK and nearly £600 above what drivers the same age pay in London.
Ian Wilson, car insurance expert and managing director at CompareNI.com, said ghost broking is a growing problem and criminals are using a variety of tricks to appear legitimate and gain the trust of unsuspecting motorists.
"By offering significantly lower premiums, scammers attract budget-conscious shoppers, especially young drivers, who may not have the experience or awareness of the risks associated with these 'too good to be true' deals," said Wilson.
Ghost brokers typically operate through social media or messaging apps, posing as legitimate insurance intermediaries. Wilson outlined the most common methods used.
"Some of the most common tricks ghost brokers use include pretending to take out a policy in a driver's name and supplying them with forged documents, or purchasing a genuine policy but altering key details like a driver's age, address, or job title to falsely lower the premium," said Wilson. "Another method is to take out a policy legitimately, but then cancel it soon after without the driver realising."
Meanwhile, an Aviva survey of 2,000 drivers, aged 17 to 25, found that nearly one in three had purchased car insurance from someone operating illegally on social media, with 89% of those who bought cover that way experiencing serious consequences, including one in six who reported being stopped by police for driving without insurance.
Aviva also uncovered one suspected ghost broker who had pocketed more than £150,000 selling worthless policies online. Motorists caught driving without valid insurance face a £300 fixed penalty notice, six penalty points, and potential vehicle seizure, with knock-on effects for future premiums.
The false policyholder details fed into ghost-brokered policies can significantly skew risk assessments and produce unpredictable loss ratios, while the early cancellation of fraudulently obtained policies reduces book value and drives mounting claims disputes. Ghost broking also elevates fraud detection costs, reputational risks, and regulatory scrutiny for carriers, with manipulated policyholder data distorting underwriting exposure across the market.
The FCA has now entered the debate directly. A warning issued in May 2026 is expected to increase scrutiny of how insurers, brokers, and intermediaries monitor online applications and detect suspicious policies sold through social media and messaging platforms.
Aviva has warned that the rise in ghost broking inflates overall claims costs, increases pressure on legitimate insurers to verify identities and documents, and ultimately pushes up premiums for law-abiding drivers, while also eroding consumer trust and making it harder to engage younger customers online.
Looking ahead, Wilson said drivers are often aware that scams exist but do not know the specific warning signs to look for.
"As a general rule of thumb, if a company on social media offers car insurance that is dramatically cheaper than other quotes on the market, it is likely a scam and needs to be investigated further," he said. "Drivers should always verify the broker's credentials, check their policy documents thoroughly, avoid paying with cash or bank transfer, and if in doubt, contact the insurer directly."
