"Beware when responding to adverts that appear too good to be true on social media." - Direct Line.

Car insurance firm Direct Line is warning consumers not to get sucked into buying “worthless” fake policies from online con artists.

Insurance is a legal requirement, and as recent figures from the Association of British Insurers (ABI) show, it can be expensive. During the final three months of 2019, the average fully comprehensive insurance premium cost £484 — the third-highest average since the ABI started collecting the data in 2012.

Direct Line says it takes “just 10 seconds” to find scam artists, known as ghost brokers, on social media, where they often target vulnerable consumers. The fraudsters pretend to sell insurance from big-name companies such as Direct Line, Churchill and Aviva, but Direct Line says the paperwork is “worthless”.

Social network homepages on monitor screen

The company claims to have shut down more than 500 “ghost brokers” using the Direct Line name on major social media platforms, but the company is still urging consumers to be vigilant. In particular, the firm is advising drivers to use their instincts, and walk away from deals that look too good to be true.

“Social media platforms are being targeted by these scam artists, and it is important we continue to work together to protect consumers from being misled into buying a worthless car insurance policy,” said Steve Barrett, head of motor insurance at Direct Line. “Fraud adds £50 to the insurance premiums of honest customers, so for every person who mistakenly thinks they save money using a ghost broker; everyone else pays more.

Social media icons on smartphone

“Consumers need to be aware when responding to adverts and profiles that appear too good to be true on social media, as they could find themselves a victim of fraud, losing money and potentially facing criminal charges. While insurers are doing all they can to spot these fake accounts to protect honest policyholders, drivers may only find out they have been scammed when they come to make a claim or if pulled over for a random police check.”

“We proactively engage with social media owners, identifying ghost brokers and petitioning for the removal of these pages to protect the public. We also have stringent processes in place to identify potentially fraudulent insurance applications. Anyone we suspect of operating as a ghost broker will be reported immediately to the authorities.”

Driver reading car insurance website on smartphone

Direct Line’s tips to avoid fraudulent insurance policies:

  • Only purchase motor insurance from reputable sources.
  • Official social media accounts have a blue tick. Avoid accounts that don’t have one.
  • Avoid brokers using a mobile number or personal-sounding email address
  • Avoid brokers with no business address
  • Check brokers are authorised to sell policies through the insurance company, Financial Conduct Authority (FCA) or the British Insurance Brokers’ Association (BIBA).
  • Adverts promising fixed-price insurance without having your details are likely to be fraudulent
  • Reviews with screengrabs of text messages are extremely likely to be fake
  • If communications include text such as “you can’t believe how cheap it is, bro”, “totally legit” and “not a scam, mate” – it’s probably fraudulent
  • Does the deal look too good to be true?
  • Does the website or social media page appear reputable?

If you’re concerned you may be a victim, Direct Line recommends checking whether a broker is registered with the FCA or BIBA, or checking your details with the insurer the broker says you are insured with. You can also check whether your car is insured online through www.askMID.com.