Britain’s largest insurance companies are warning that thousands of motorists are unwittingly driving without insurance after falling for multimillion-pound scams being promoted on Google, Instagram and Twitter, that are invalid or do not exist. The scams could leave other road users at risk and are estimated to push up premiums by £50 for every driver, insurers say. They are now calling for tougher web advertising laws to tackle the problem.

The scale of the epidemic is not known as drivers with fake insurance can go undetected for months. However, Aviva, Britain’s largest insurer, detected 3,100 car insurance applications linked to fake policies last year and is investigating a further 4,000. The company said that this was just the tip of the iceberg. Fraud investigators for the industry launched more than 2,300 cases last year, with victims losing £1,209 on average, according to police. Direct Line, another big insurer, has removed 500 fake insurance adverts in the past six months.

The full scale of this problem is unknown. This activity is largely under-reported as many people fail to realise that they are being confronted with spoof online ads. The scam typically snares drivers who search for cheap car insurance using the internet. They either find adverts that pop up on Google, or are targeted by adverts on social media such as Instagram and Twitter. Last month Andrew Bailey, head of the Financial Conduct Authority, called for web scams to be added to online harms legislation. Aviva said: “We agree that legislation is needed to protect consumers from the growing risk of financial harm generated online.”

TEC Reports Group is the UK’s foremost independent provider of services to the vehicle insurance sector, providing engineers, assessors services and management of motor vehicle claims through the whole lifecycle. The company works alongside credit hire, insurance and accident claims management companies, fleet and commercial vehicle operators as well as police authorities to deliver its sector-leading services.