What is a ghost broker, and how can I avoid them?
When shopping for insurance online, especially if you’re a small business trying to save money, you might come across offers that seem too good to be true.
Sometimes, they are.
What is a ghost broker?
A ghost broker is a fraudster who sells fake or invalid insurance policies. They target people looking for cheap deals and can leave you uninsured when you need cover most - potentially leaving you on the hook for a significant sum of money.
How ghost brokers work:
Ghost brokers use a few different tricks to make their ‘policies’ look real:
Selling fake policies: They create documents that look like genuine insurance but are completely made up.
Selling real policies, then cancelling them: They buy a genuine policy in your name, send you the documents, and then cancel it to pocket the refund.
Buying real policies with false details: They use incorrect information (like your age or address) to get cheaper rates, leaving the policy invalid if you claim.
Ghost brokers often operate on social media, online marketplaces, messaging apps, or even in person. They usually promise extremely cheap deals and a quick turnaround.
Why ghost broking is dangerous:
If you buy insurance from a ghost broker, you’re effectively uninsured. That means that any claim you make will be rejected, you’ll lose the money you paid and may face financial losses if something goes wrong, and you could even face legal penalties (for example, if you were driving without valid insurance cover).
How to avoid ghost brokers:
Only buy from authorised brokers or insurers. You can check the Financial Conduct Authority (FCA) register to make sure that a broker is legitimate.
Be wary of ‘too good to be true’ prices or deals. Genuine insurance has a market rate. Extreme discounts are a red flag. If it seems too good to be true, it probably is.
Check your policy with the insurer directly. Once you get your policy documents, call the insurer to confirm that the policy is active and legitimate.
What to do if you think you’ve used a ghost broker:
If you think you’ve been the victim of a ghost broker, you should do the following immediately:
Contact the insurer. Check if the policy is genuine and active.
Stop using the policy. If it’s invalid, driving or trading without real insurance could have serious consequences.
Contact Action Fraud. They’re the UK’s national fraud reporting centre (https://www.actionfraud.police.uk).
Arrange proper cover. Protect your business and stay compliant.
The sooner you act, the less likely you are to suffer financial loss or serious legal problems.
Insurance shouldn’t be confusing. Visit our no-nonsense, plain English glossary to make sense of other common terms.
Got a question about your cover, or want to know more? Visit our contact page and drop us a message. We’d love to help.
