What is Ghost Broking? Fake Insurance and How to Spot It
Ghost broking is a form of car insurance fraud where criminals sell fake, invalid or cancelled policies - often at a tempting price. Victims are left uninsured without realising it, sometimes only finding out when stopped by police or after an accident.
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What is ghost broking?
Ghost broking is a type of fraud where criminals pose as insurance brokers and sell fake, invalid or deliberately cancelled car insurance policies. The term covers a range of scams - from entirely fabricated policies to real policies taken out in a victim's name and then cancelled shortly after, leaving the buyer uninsured.
Ghost brokers often advertise on social media, messaging apps or unofficial websites. They typically offer policies at prices that appear significantly lower than market rate, targeting drivers who may struggle to find affordable cover - particularly younger drivers.
Because the Motor Insurance Database (MID) can take up to 48 hours to update, victims may not realise their policy is fake until they are stopped by police, involved in an accident, or attempt to make a claim.
It is not a niche problem. The Insurance Fraud Bureau (IFB) receives thousands of ghost broking reports each year, and the practice is particularly prevalent in the temporary and short-term insurance market where buyers are less familiar with what a legitimate policy looks like.
How do ghost brokers operate?
Ghost brokers use several methods to defraud victims:
- Selling entirely fabricated policy documents that look convincing but have no real backing from an insurer.
- Taking out a genuine policy in the victim's name, collecting payment, then cancelling it shortly after and pocketing the refund.
- Falsifying personal details on a real policy - such as the driver's age, address or occupation - to obtain a lower premium. The policy is technically real but void at the point of a claim because the details are fraudulent.
- Impersonating legitimate, well-known insurance brands using similar domains, copied logos and professional-looking emails.
Many ghost brokers operate through social media platforms, WhatsApp groups and unofficial websites. They often copy branding from legitimate insurers to appear credible. Some operate through networks, meaning multiple people may be involved in selling the same fraudulent policies.
What are the consequences of a ghost policy?
If you have unknowingly purchased a ghost policy, you are effectively driving without insurance. This can result in:
- A fixed penalty of £300 and 6 penalty points on your licence.
- Your vehicle being seized by police.
- A court summons, which can result in an unlimited fine or a driving ban.
- No cover if you are involved in an accident - leaving you personally liable for any damages or injuries caused to third parties.
- The other party in an accident being able to pursue you directly for compensation.
You will also need to arrange a legitimate policy immediately. The fact that you were defrauded does not protect you from prosecution for driving without insurance - your obligation to hold valid cover remains regardless of how your policy was obtained.
Always check that your vehicle is showing on the Motor Insurance Database after taking out cover. Our guide to using askMID to check if your car is insured explains how to do this.
What you need to know - the FCA
All legitimate UK insurance companies and brokers must be authorised and regulated by the Financial Conduct Authority (FCA). The FCA maintains a public Register of all authorised firms and individuals involved in regulated financial activities.
Covertime Limited is authorised and regulated by the FCA under Firm Reference Number 1022738. You can verify any firm by searching the FCA Register at fca.org.uk. The search takes seconds and will confirm whether a business is authorised to sell insurance.
If a website or individual cannot provide a valid FCA Firm Reference Number - or if their number does not match what appears on the FCA Register - do not proceed. You can report unauthorised firms directly to the FCA or to Action Fraud.
How to spot a fake insurance website
Here are the key things to check before purchasing any insurance policy online:
- FCA registration - check the firm's Firm Reference Number on the FCA Register before paying anything.
- Pricing that seems unusually low compared to standard quotes from established providers.
- Requests for payment via bank transfer, social media or messaging apps rather than through a secure payment page.
- Missing Terms of Business or Privacy Notice - legitimate providers are legally required to provide both.
- Limited or no verifiable online presence - no Trustpilot profile, no Companies House registration, no Google Business Profile.
- Asking too few questions - a legitimate provider will always ask for vehicle registration, licence details, dates and duration of cover before generating a quote.
- Unsolicited contact - being approached out of the blue via social media or messaging apps offering insurance deals.
If you are buying temporary car insurance online, always verify the provider is FCA-authorised before entering any personal or payment details. The few seconds it takes to check the FCA Register can save you significant trouble later.
Is this Covertime?
Our only website is www.covertime.com. We also have an official app available on the Apple App Store and Google Play, listed under the name Covertime.
Our FCA Firm Reference Number is 1022738. We will never contact you out of the blue to arrange a policy, and Covertime staff will never ask you to pay for insurance via social media or messaging apps.
If you spot a website, app or social media account claiming to be Covertime, do not use it. Verify our details on the FCA Register and contact us only through the details listed on our official website.
Only use the contact details listed on covertime.com or on our profile in the FCA directory. You can reach our support team through our help centre.
What to do if you think you have been targeted
If you believe you have been a victim of ghost broking, report it to Action Fraud online or by calling 0300 123 2040. You should also report it to the FCA and, if appropriate, to the police.
Check whether your vehicle is legitimately insured by using the askMID service (Navigate). If your car is not showing on the Motor Insurance Database, do not drive it until you have taken out a valid policy from an FCA-authorised provider.
If you purchased a policy you are unsure about, contact the insurer named on the documents directly - using contact details you have independently verified from the FCA Register, not details provided by the person who sold you the policy.
Keep any documentation, payment receipts, screenshots or messages related to the suspected fraud. These will be useful when making a report to Action Fraud or the FCA.
Ghost broking is particularly prevalent around high-value vehicles. See our guide to the most stolen cars in the UK to understand which models attract the most attention from thieves and fraudsters.
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