Young drivers are being warned they could face fines of up to £5,000 if they are not careful when getting their cars on the road
Brits could be unknowingly driving uninsured after falling victim to a surge in fake car insurance scams being pushed through social media and messaging apps.
The alarm has been raised by the Financial Conduct Authority after new research found almost half of motorists aged 17 to 25 have bought insurance through platforms such as Instagram, Facebook, Snapchat or WhatsApp.
The watchdog said criminals known as ‘ghost brokers’ are increasingly targeting cash-strapped young drivers with cut-price deals that appear genuine but leave victims without valid cover.
According to the study, 49 per cent of young drivers said they had bought insurance through social media or messaging apps, while four in 10 admitted they were not confident they could spot a fake policy.
The FCA warned that bogus brokers often pose as legitimate insurance sellers and offer premiums that look far cheaper than mainstream insurers.
In some cases, the policies are entirely fake. In others, the fraudsters manipulate details on genuine applications – such as addresses, occupations or driving histories – to slash the premium before pocketing the money. Policies may also be cancelled shortly after purchase without the driver realising.
Victims can then discover they are uninsured only after being stopped by police or involved in an accident. Driving without valid insurance is a criminal offence in the UK and can lead to fixed penalties, points on a licence, vehicle seizure and even disqualification from driving.
The FCA’s findings also highlight how cost-of-living pressures are making younger motorists more vulnerable to scams. One in seven respondents said they struggled to fit insurance costs into their monthly budget, while 45 per cent said they generally trust products or services bought through social media.
Graeme Reynolds, director of insurance at the FCA, said: “Tight budgets make cheap offers tempting – and scammers take advantage of that. Don’t get ghosted by a policy that doesn’t exist. Check the FCA Firm Checker before you buy, because driving uninsured could cost you far more than any premium.”
The warning comes amid evidence that ghost broking is rapidly increasing. The Insurance Fraud Bureau said it recorded a 52 per cent rise in ghost broking activity between 2022 and 2024, while insurer Aviva reported a 22% surge in cases since 2023.
The FCA is now working with social media influencers in an attempt to warn younger drivers about the risks. Motorists are being urged to be suspicious of deals that appear ‘too good to be true’, especially if they are only available through social media or messaging platforms.
The watchdog said genuine insurance firms should have a proper website, phone number and business address. Drivers are also being advised to use the FCA’s Firm Checker tool to verify a company is authorised and to ensure the contact details match those listed on the regulator’s register.
