In Focus: How are ghost brokers utilising social media to commit fraud and what can be done to mitigate this approach?

WE ASKED: ’How are ghost brokers utilising social media to commit fraud and what can be done to mitigate this approach?’

Simon Klust, detective inspector and deputy head, Insurance Fraud Enforcement Department

Ghost broking represents a pernicious threat to the public and insurers. Ghost brokers pose as middlemen for well known insurance companies, claiming to offer legitimate insurance at a significantly cheaper price.

The City of London Police’s Insurance Fraud Enforcement Department (Ifed) is currently investigating 69 live ghost broking cases – a 25% increase compared to the previous quarter.

New drivers are often targeted by ghost brokers.

With one in five 18 to 24-year-olds now using social media to search for car insurance, it is easy to see how a well crafted social media post can capture the attention of someone who is unsure of how to obtain coverage.

The lack of consistent regulations around what constitutes an acceptable social media post, as well as the absence of enforceable mechanisms to have fraudulent content removed quickly, creates a fertile environment for fraudsters to operate.

Ifed uses a range of tactics to mitigate this threat. In addition to traditional prosecutions, it employs civil powers and engages with other statutory bodies to deprive fraudsters of their ill-gotten funds.

Officers also deliver cease and desist notices to ghost brokers at an early stage of offending to divert them away from the criminal justice system. The reoffending rate for ghost brokers who receive cease and desist notices from Ifed is below 3%.

As a result, the number of ghost brokers dealt with by Ifed increased by 85% during the three years leading up to 2023.

This means more offenders are visited, disrupted and educated to prevent the public and industry from becoming victims.

Ruth Needham, partner and head of fraud, Kennedys

Ghost brokers exploit social media platforms to target a younger, digitally active audience that is often searching for cheaper products online, including for essential services such as insurance.

Social media provides fraudsters with broad, instant access to users who may not fully understand the risks involved.

The normalisation of online purchases through influencers and social media platforms makes fraudulent schemes via these channels appear credible and trustworthy.

Ghost brokers capitalise on the fact that car insurance – an expensive and compulsory expense – is often resented.

Consequently, individuals – particularly young drivers – are drawn to deals that seem too good to be true, promoted on platforms such as Facebook, Instagram or TikTok.

Mitigating this issue requires a combination of proactive measures. Education is paramount – raising awareness about the risks of ghost broking and helping individuals recognise the warning signs of fraudulent offers.

Recent campaigns by organisations such as the Insurance Fraud Bureau (IFB) have increased public awareness of ghost broking, but the focus of such marketing must extend to younger demographics – particularly new drivers who are often the primary targets of these scams.

This involves leveraging the same platforms that are used by fraudsters – such as TikTok, Snapchat and Instagram – to deliver compelling educational content.

Partnering with influencers to disseminate these messages may also help make content more relatable and engaging.

In addition, stronger regulation and monitoring of social media advertisements can help curb fraudulent activity.

Platforms could implement stricter ad vetting processes and collaborate with law enforcement and insurance bodies to flag and remove suspicious accounts or promotions.

Combined efforts in education, awareness campaigns and tighter social media oversight can significantly reduce the prevalence of ghost broking scams.

Mark Allen, head of fraud and financial crime, ABI

Social media presents a potent breeding ground for fraudsters, especially illegal insurance intermediaries or ghost brokers.

Anyone can be a victim of insurance fraud and on platforms such as Facebook, Instagram, TikTok and Snapchat, these rogue scammers can lure victims in with deals that seem too good to be true.

While some social media organisations have started to introduce due diligence measures to prevent scam adverts on their platforms and offer protection against fraudsters, more needs to be done.

Collaboration has always been vital to tackle fraud and through our work with the Home Office and Joint Fraud Taskforce, we were delighted to see the launch of the Insurance Sector Fraud Charter earlier this year (October 2024).

Among other things, the Charter includes a commitment to strengthen consumer awareness of fraud through education and campaigns.

With ABI research published in September 2024 showing that only one in 10 people are aware of ghost broking, raising awareness of this threat is vital to ensure that people know the signs and can protect themselves from the stress, misery and financial implications ghost broking can bring.

There are also simple steps that consumers can take to ensure they purchase legitimate insurance, including checking whether a broker is a member of Biba, or if the insurer is a member of the Motor Insurers’ Bureau and ensuring that the sellers are registered with the FCA.

The Insurance Fraud Bureau (IFB) receives more intelligence on ghost broking activity than any other type of organised counter fraud body and tackling it remains a top priority, with the industry constantly taking action to deter it.

For example, the IFB has developed application fraud products that allow insurers to share intelligence quickly and Ifed uses its full suite of enforcement tools to disrupt ghost broking activity.

Jon Radford, head of intelligence, investigations and data services, Insurance Fraud Bureau

Ghost broking scams are an increasing concern. Rising cost of living pressures, particularly for young drivers, are providing fertile ground for ghost brokers.

The discreet nature of these scams on social media further complicates efforts to disrupt this activity.

As a central intelligence hub, the IFB empowers insurers to share information on suspected and confirmed fraud threats.

This year, over 41,000 fraudulent motor insurance applications have been uncovered through member intelligence.

These fraudulent policies have been cancelled and the intelligence quickly shared with insurers to prevent further harm.

Collaboration with law enforcement is also critical. We work closely with Ifed to remove ghost brokers’ social media accounts and bring offenders to justice.

Earlier this year, in March 2024, a joint operation with Ifed led to a ghost broker being sentenced to 240 hours of unpaid work and ordered to pay over £3,000 in compensation.

Raising awareness of ghost broking through prevention campaigns is another key strategy in tackling this type of fraud.

This summer, the IFB launched an integrated campaign in partnership with the Industry Communications Working Group. The campaign featured on BBC Radio 1’s Newsbeat show in order to reach younger audiences.

More recently, as part of our ongoing Fraud Cons campaign – which first launched back in 2023 – we ran targeted ads to educate young drivers about the risks of ghost broking scams. These awareness messages were viewed 2.4 million times across platforms including Facebook, Snapchat and TikTok.

Tackling ghost broking is a complex and ongoing challenge that requires a multipronged approach.

Collaboration remains key. By engaging with the IFB’s counter fraud initiatives and helping to raise awareness – particularly among groups most at risk – the industry is in the strongest position to collectively combat ghost brokers.