Some ’99% of customers wouldn’t understand what a ghost broker is,’ says counter-fraud expert

Ghost brokers remain a persistent threat to consumers, especially as the temptation of lower premium prices become more attractive to those struggling with cost of living-related pressures.

Despite the increased risk of ghost broking leaving consumers unprotected, many of the general public are not even aware that this particular sort of criminal behaviour exists.

Speaking at Insurance Times’ Fraud Charter roundtable event last week (16 May 2023), counter-fraud experts agreed that increasing awareness of ghost broking was vital. 

Paul Holmes, partner at legal services firm DWF, highlighted that, where the average consumer is concerned, “nobody understands” what ghost broking even is.

“[Some] 99% of customers wouldn’t know what a ghost broker is, in reality,” he said.

“When they see it online, they wouldn’t even question it.”

Ghost brokers are individuals or organised criminal gangs who imitate legitimate brokers to sell fraudulent insurance policies, often luring in potential policyholders via false advertising and with promises of heavily discounted premiums.

Having reeled in an unwitting customer, many ghost brokers will then encourage the victim to contact them further through popular end-to-end encrypted messaging software, such as WhatsApp.

Ben Fletcher, director of financial crime at insurer LV, added that the problem of ghost broking was especially challenging because of a shared strategy of deliberately targeting vulnerable consumers.

“[Ghost brokers] are largely trying to exploit people who think they are probably beating the system,” he said.

“But, they are going to end up in a position where their car [for example] is going to be at best uninsured, at worst seized, or if they have an accident, they could end up [having to pay] the third party costs themselves.

“So, we are still seeing a persistent threat with ghost broking and I can’t see that abating anytime soon.”


Tackling ghost broking effectively will require a degree of public understanding of what term refers to. Various campaigns have had success in attempting to raise the profile of this sort of fraudulent activity, but some experts at the Fraud Charter roundtable suggested that the term ghost broking itself was potentially confusing for some members of the public. 

During the discussion, it was suggested that the alternative phrase ’fake broking’ could be used to generate more understanding of what exactly the crime involved 

Donna Scully, director at Carpenters Group, said the word fake was “very powerful”, as it clearly described the services being offered by ghost brokers as not legitimate.

”Fake means to me that they’re not real and they don’t exist,” she said.

Holmes added: ”Everybody would understand [fake broking] – ’don’t buy a policy from a fake broker because they are selling fake policies.’”

He also highlighted that ghost broking was sometimes confused with identity fraud. In motor lines for example, he explained that “there’s an awful lot of simple identity fraud, where the individuals do not exist”.

“One mistake I see on cases is that you’re sent cases [and think] ’this must be ghost broking becuase we can’t find them,’” he said.

“Actually, it is often the case that people simply make up identities to have accidents, knowing that insurers will pay.

”So, it is very important for insurance not to always think of ghost broking in that regard, because sometimes one or both parties are totally invented.”

Fake businesses

Holmes also issued a warning to others working in the counter-fraud space that fraudsters were increasingly setting up fictitious “phoenix companies”, which were set up between six and 12 months before fraudulent claims were committed to lend perceived legitimacy to a claim when it was eventually sent in. 

David Phillips, NFU Mutual’s claims validation technical manager, added fraudsters were pursuing this attempt to increase perceived legitimacy by setting themselves up with Companies House addresses.

Companies House is the executive agency of the British government that maintains a register of all firms in the country. Because anyone can freely run a check on the website to check a company exists, a fake account set up on the site can help to trick customers into believing a ghost broker is legitimate.

Holmes added: ”There are companies who are supposedly [based] at some industrial unit, but when you have a look there’s no sign of them. 

”There are businesses set up and when you look, the business simply doesn’t exist whatsoever and never has done – this is happening daily, so commercial insurers need to be really aware of this.”

Behaviour change

Meanwhile, Fletcher said that LV had seen a 43% year-on-year increase in the amount of ghost brokers the insurer identified and was trying to take action against.

He warned that while the industry has completed a “huge amount of work” to tackle the issue, fraudsters would “continue to try and find ways to circumvent” any checks and balances set up by the insurance sector.

He felt that one issue facing the industry was the challenge of promoting behaviour change to stop consumers using ghost brokers.

“The reality is, times change very quickly and peoples’ attitudes change,” he said.

“If you want to go through a behaviour change, that is continuous commitment from an investment, resource, time, effort and energy [point of view] and it’s quite hard to measure the benefit of it.”

Younger generation

Phillips added that it was particularly hard to change the mindset of younger generations.

And Dan Mount, principal of online safety at Ofcom, felt these younger populations were often swayed by what they saw in videos on social media sites such as Instagram or Twitter.

During a webinar held in January 2023 on the subject of ghost broking, Clare Lunn, head of counter fraud at Markerstudy, said social media was becoming a powerful medium for ghost brokers because they could advertise to huge numbers while concealing their real details behind fake profiles.

Research by Which?, which was published in June 2022, also revealed that tens of thousands of drivers were being potentially left uninsured on the roads, with many ghost brokers offering car insurance on social media that was either non-existent or missed out key parts of coverage.

For example, of the 47 profiles that matched Which?’s search on Instagram, a total of 25 appeared to be offering quotes or cover to UK drivers, while showing no signs of being authorised by the FCA.

Mount said: “If I’m looking for an answer to a question, I usually end up reading something with quite a lot of text and I’m looking at different places, whereas the younger generation look for a video.

“That’s where they get the truth – if it’s in a video, it happened, it’s real.

“So, in that sense, using social media and video sharing platforms as sales platforms – and video being the evidence that you need to drive the sale – is actually far more effective with younger demographics.”

Phillips highlighted that social media can also be effective in raising awareness of ghost broking and provided the example of an online industry-wide campaign that was “very impactful”.

He added: “We have to show consumers we are on their side, we are here for the good of everybody,” he said.