News
Motor finance fraud falls
Motor finance fraud cases fell by 27% in Q1 2012 compared with Q1 2011, according to the latest figures from the Finance & Leasing Association, the motor finance trade body. In total, there were 169 recorded cases of motor fraud in Q1 2012, involving around £2.4 million of outstanding finance on the associated cars.
Lenders and dealers also stopped 1,687 attempted frauds at the application stage in Q1 2012, saving the industry more than £20 million.
“First party fraud” – where a person either hires their car out for profit, or applies for credit on behalf of someone else without informing the finance company, or otherwise misuses their credit account – was the most common type of fraud in Q1 2012. It accounted for 37.3% of all cases. Selling a car still on finance (known as ‘conversion’ fraud) accounted for 34.3% of cases, and 21.3% of cases were caused by fraudsters lying on their finance application.
Paul Harrison, the FLA’s head of motor finance, commented on the figures:
“The hard work of lenders and dealers to prevent motor finance fraud resulted in £20 million of savings in the first quarter of this year.
“The downward trend in motor fraud reflects the rigorous application of lending criteria by finance companies and the use of the array of anti-fraud tools at their disposal. The motor industry continues to take the fight to fraudsters.”
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Note to editors:
If you are buying a used car, make sure you don’t buy a car that still has outstanding finance:
- Do a history check with CDL (https://www.mycarcheck.com/), Experian (http://www.autocheck.co.uk/) or HPI (http://www.hpicheck.com/), and make sure you buy a full history. It’s a small cost compared with the cost of the car and will give you peace of mind. A comprehensive car history check will give you a full description of the car and its past ownership, and should tell you if there is outstanding finance on it. It will also tell you the mechanical history of the car – whether it has been in an accident or scrapped, whether it has had its mileage adjusted, and whether it has ever been recorded as stolen.
- When buying a car, new or used, do your research. Know what to expect from the make, model and age of the vehicle – if the deal looks like it’s too good to be true, it probably is.
- Check the car thoroughly for damage, and make sure the vehicle identification numbers (VINs) match the documents.
- Take the car for a test drive. If buying a used car, consider having it checked out by an auto mechanic.
- Consider in advance how you will pay for the vehicle. Cash can be dangerous, particularly if meeting a private seller at an unfamiliar address. Always meet the seller at their residential address, and never – for example – in a pub car park or petrol station.
- If buying a vehicle on the web, ensure you’ve done all your checks before transferring any payment.
The FLA is the leading trade association for the motor finance sector in the UK. FLA members provided £19.8 billion of motor finance in 2011 and financed more than 64% of all private new car registrations in the UK.
For further media information, please contact:
Russell Hamblin-Boone, FLA
T: 020 7420 9656 E: russell.hamblin-boone@fla.org.uk M: 07810 374110
Helen Saxon, FLA
T: 020 7420 9664 E: helen.saxon@fla.org.uk M: 07918 766 993