Motor Finance Fraud and Risk
There are always some risks involved when providing finance. Managing those risks is a high priority for all lenders, particularly in difficult market conditions. In the motor finance market, some of the risk is allayed because lenders generally use the vehicle as security. See Secured Lending. Risk, however, can never be completely removed from any form of lending. Financial crime and fraud are major concerns for the industry.
The FLA is proactively helping members to tackle emerging trends in financial crime and fraud to reduce risk. We host a number of Committees and Working Groups to help identify industry concerns and to coordinate industry action. Current FLA initiatives to help the industry include:
- Sponsorship of the AVCIS Vehicle Fraud Unit. See Working with the Police.
- Introduction of the FLA Vehicle Recovery Scheme.
- Working with the Motor Insurers’ Bureau to provide access for members to the Motor Insurance Database (MID).
- Access to the DVLA’s range of services to check driver entitlement and the authenticity of driving licences.
- Introduction of a new FLA Fraud Intelligence Sharing System.
- Publication of guidance for finance companies on how to respond to and manage incidences of vehicle mileage tampering or ‘clocking’.
- Drafting of a new industry standard to help capture sufficient customer information on finance agreements to help support any subsequent cases of vehicle finance fraud.
- An industry questionnaire for authenticating Innocent Private Purchaser (IPP) claims.
See Financial Crime and Fraud for more information.