Social media fast becoming linchpin for ghost broking – Kennedys

Social media is a double edged sword when it comes to ghost broking – for Ruth Needham, partner and head of fraud at London-headquartered law firm Kennedys, these sites serve as both a “powerful tool” in the fight against ghost broking, while also contributing to the increase in this type of insurance fraud.

Ghost broking is when fraudsters imitate insurance brokers in order to sell fake insurance policies. 

According to figures published by the Office for National Statistics in September 2023, ghost broking activity is on the up, with 21,149 insurance fraud offences referred to the National Fraud Intelligence Bureau (NFIB) between April 2022 and March 2023.

More recently, in July 2024, the Insurance Fraud Enforcement Department (Ifed) revealed that 22-year-old Wahidullah Usmani had pleaded guilty to fraud by false representation after pocketing £17,618 made by selling invalid car insurance policies on Instagram.

Needham confirmed that social media platforms – like Instagram, TikTok and Facebook – are often exploited by ghost brokers posing as legitimate insurance professionals to lure typically inexperienced consumers to buy mostly motor products that have suspiciously low rates.

She noted that ghost brokers will “leverage the trust placed in influencers and online personalities, using their platforms to advertise and promote fraudulent services”.

She continued: “Ghost brokers can use this trust to present themselves as credible sources of information, making it difficult for users to distinguish between legitimate offers and fraudulent ones.

“New or young drivers, who may be more susceptible to these schemes, often turn to social media to follow influencers and make purchasing decisions based on their recommendations.

“As a result, the intersection of influencer culture and online fraud presents a growing challenge for consumer protection and highlights the need for greater awareness and education around the risks of such scams.”

Insurance influencers

Although social media websites present a fertile hunting ground for ghost brokers, these platforms are also helpful when it comes to educating insurance customers and reaching the demographic most likely to be conned by scammers via this method.

Needham explained that if insurers and other sector stakeholders focus on raising awareness of ghost broking and building a sense of community around consumer protection, “they can effectively counterbalance [fraudsters’ influence]”.

For example, insurers can use social media platforms to engage with consumers, raise awareness about fraud risks and provide educational content to help potential customers make informed decisions.

Partnering with influencers trusted by younger audiences can amplify this work too, she added.

Needham continued: “The insurance sector can create long-term relationships with influencers by focusing on shared values of transparency, trust, and education.

“By establishing a clear, ongoing partnership with influencers, insurers can gradually build trust with young drivers, helping them avoid fraud while educating them on the value of choosing reputable providers.

“These campaigns, when thoughtfully executed, can shift the narrative around insurance and fraud prevention, positioning influencers as positive forces for change in the industry.

“By integrating influencers into fraud prevention campaigns, the insurance industry can foster trust, raise awareness and educate potential customers in a way that resonates with younger generations.”