FCA warning to young drivers as half fall for 'ghosts'

The UK's finance watchdog is warning that young drivers' 'trust' in social media is exposing them to a costly insurance scam. The Financial Conduct Authority (FCA) says half of all 17-25-year-old motorists have bought vehicle insurance through social media or messaging apps. Last Wednesday, they urged caution over fears young drivers could fall victim to 'ghost broking' scams. This is where criminals pose as insurance providers to sell 'bogus' policies, leaving victims uninsured and at risk of fines, prosecutions or vehicle seizures. The policies are either completely fake, cancelled quickly after purchase or include false details that render them invalid. The FCA surveyed 1,000 young drivers and 45% said they 'generally trust' products or services' bought via social media. However four in 10 (39%) admitted they weren't confident in spotting the signs of a fake policy. One in seven (15%) said they find it difficult to fit insurance into their monthly budget, meaning young drivers may also be at greater risk due to cost of living pressures. The watchdog claims this means 'thousands' could be paying for cover that doesn't even exist. To avoid falling victim to the scam they say to be wary of offers that 'sound too good to be true' and avoid deals only available through social media and messaging platforms. They say genuine insurance providers sellers should have a legitimate website, phone number and postal address. They also encourage young drivers to visit the FCA's Firm Checker website which will confirm if the company is authorised to sell insurance. Checking their contact details against the ones registered on the Firm Checker is also advised. The FCA say they're working with social media influencers to warn young drivers about the growing threat of ghost broking. Graeme Reynolds, director of insurance at the FCA, said: "Tight budgets make cheap offers tempting and scammers take advantage of that. Do not 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."