Nearly one in three (30%) young drivers have purchased car insurance from someone operating illegally on social media platforms by selling invalid or fake car insurance, according to an Aviva survey of 2,000 drivers aged 17-25.
The research was conducted to highlight the issue of ghost broking, where fraudsters pose as legitimate insurance companies, illegally selling fake or invalid insurance to young drivers and motorists who find it difficult to buy insurance.
According to the insurer, those who purchased cover via social media almost certainly dealt with a ghost broker and likely bought worthless insurance. This puts them at risk of having their car seized, facing an unlimited fine and receiving a driving ban.
89% of young drivers who bought insurance on social media experienced serious consequences, including one in six (17%) who said they were stopped by police for driving without insurance.
Katriona Cunningham, policy application fraud lead at Aviva, said, “Young drivers aged 17–25 are the first generation to grow up with social media being an integral part of their daily lives. It is understandable, then, that when looking for car insurance, 30% of young drivers said they turn to social media.
“However, ghost brokers are actively targeting young drivers on social media platforms, offering cheap-but-worthless car insurance that puts the young driver at risk of being uninsured.
“I would say to all young drivers: if a deal looks too good to be true, it probably is. If you engage with someone offering cheap insurance on a social media site, they are probably fraudsters. Avoid anyone offering access to cheap car insurance via social media.”
Young drivers gave a range of responses for why they would look for insurance on social media, including one in five (19%) who say they “can’t see any reason not to buy insurance on social media” – demonstrating a lack of awareness of the risks and penalties involved.
Once on social media, young drivers are seized upon by ghost brokers, with nearly four out of five young drivers (77%) reporting that they have seen a social post advertising cheap car insurance.
Young drivers are split on how trustworthy those individuals are, with 48% saying the people approaching them with offers of cheap insurance are trustworthy, and 48% saying they are not trustworthy.
That said, 63% agree they “would be suspicious of anyone offering cheap car insurance on social media,” while only 15% said they would not be suspicious.
Of those young drivers who purchased car insurance via social media, 89% had serious problems with their policy. The types of problems identified by young drivers include:
- 49% said their details (e.g. age, address) were misrepresented on the policy, meaning it was not valid
- 22% said they made a claim which was declined because they weren’t properly insured
- 21% said the seller didn’t help them when they raised concerns
- 17% said the police stopped them and impounded their vehicle or issued a fine for driving without adequate insurance.
The research comes as Aviva revealed it has stopped or removed nearly 17,000 policies year-to-date due to application fraud, such as ghost broking.
Aviva has identified nearly 7,000 cases so far this year linked to open ghost broking and application fraud investigations.