A leading insurance company has claimed that more than 10,000 motor insurance policies have been taken out by so-called "ghost brokers".
Hundreds of policies have been cancelled and affecting cover where accidents occurred.
Gardaí say that one or two "major" figures are behind the criminal enterprise.
So-called "ghost brokers" falsify information and sometimes use stolen credit cards to pay for policies on behalf of unsuspecting customers.
The issue only arises when the insurance firm realises a stolen card was used, the policy is cancelled and unsuspecting consumers are driving around with no insurance.
Aviva has revealed that the company is dealing with up to 1,500 policies that have been taken out fraudulently.
The insurer claims up to 10,000 policies nationally have been taken out by ghost brokers.
Gardaí concede it is an issue and said that one or two "major players" are behind the crime, organising a network of smaller operators.
The unit heading up investigations into the issue has brought insurance companies together and is sharing information in a bid to break up the highly covert black market enterprises.
One man has been arrested and charged with a number of offences as part of the investigations.
He is due to appear before Trim District Court tomorrow.
Interim CEO of Insurance Ireland Gerry Hassett said it is a "disturbing development" that thousands of motorists have been left uninsured.
He told the Joint Oireachtas Committee on Finance, Public Expenditure and Reform that his "sense is that some companies have been more affected than others."
Mr Hassett said he is aware that incidents do vary by company.
Nataliya Nastechyk, who was duped by a ghost broker, paid more than €2,000 for her policy as well as several hundred euro as a brokerage fee.
The fee she was charged by the illegal broker was more than 50% less than what a legitimate company had quoted, marking a very significant saving.
However, the fraudster involved in her case supplied misleading information to the insurance company concerned and they detected the fraud.
She explained how the man who acted as a broker spoke Russian, which was useful, as she was from Ukraine and had poor English at the time, and did not understand the insurance system here.
She said she was cautious and told him she did not want to do anything illegal.
"I told him I am looking for a good one (policy) as I was working here and living with my children and I wanted everything to be right," she said.
Ms Nastechyk explained how she paid a supposed brokerage fee directly into his bank account, after she received her insurance certificate and disc in the post from her insurance company.
The people behind the scams target people online, most often on social media with advertisements in a range of languages.
It is understood that a number of advertisements have been reported to social media companies and have been subsequently removed.
Superintendent Tom Murphy, who is leading investigations into the scheme, said: "A lot of the people we have found are pure innocent victims, new Irish people coming in who fall into a trap because they are targeted in their own language.
"These ghost brokers are preying on the naivety and inexperience of these people to fully understand the Irish system, they prey on victims."
The head of Fraud Investigation with Aviva told RTÉ News that his investigators have uncovered ten operational ghost brokers in Ireland at present.
Rob Smyth said that up to ten thousand policies have been taken out by the illicit dealers.
Mr Smyth said Aviva alone has had around 1,500 fraudulent policies on it's books.
He said: "These brokers are operating through social media and as a result it is mainly aimed towards non-Irish, some of these people are being genuinely trapped."
He added that the ghost brokers often manipulate or falsify 'No Claims Bonus' certificates and that means they are uninsured if the fraud is detected in the event a claim is made on the policy.
Government to offer gardaí any help that is needed
The Tánaiste has said the Government will offer the gardaí any help that is needed in order to deal with the issue of so called 'ghost brokers'.
Simon Coveney was speaking during Leaders' Questions in the Dáil.
Fianna Fáil's Dara Calleary asked what action the Government intends to take on foot of the revelations.
Mr Coveney said the gardaí are liaising with the insurance industry to try to get a handle on the extent of the issue.
He said it is consumers who are vulnerable, especially those who think they are insured but they are not in some cases.
Earlier, the interim CEO of Insurance Ireland Gerry Hassett told the Joint Committee on Finance, Public Expenditure and Reform that the details revealed today were a"disturbing development".
Mr Hasset said the industry needed to get better at identifying the issue.
Meanwhile, the group representing legitimate insurance brokers, Brokers Ireland, has said the term 'ghost broker' is "very unfortunate".
The group said those involved are not brokers and should instead be referred to as "fraudsters".