News
Lenders fight back against motor fraud
Lenders and dealers are working together to tackle motor finance fraud. The Finance & Leasing Association’s statistics show that only 8.7% of attempted motor finance frauds succeed. And of those that do succeed, 44% of the cars involved are recovered by lenders.
The FLA statistics reveal that in Q2 2010, there were 2,361 cases of attempted or suspected motor finance fraud. Rigorous checks by dealers and finance companies kept the actual number of cases where the fraud was not spotted down to 224. This figure is also down 5% on cases of actual fraud recorded in the first quarter of last year.
Lenders’ investigating agents work with the police to recover cars in fraudulent cases. The FLA has also sponsored the ACPO Vehicle Crime Intelligence Service’s vehicle fraud unit since its inception in 2007 to recover cars and prosecute fraudsters. In the past 12 months, more than 300 cars (44% of all fraud cases) have been recovered through a combination of AVCIS, finance company investigators and local police forces.
The FLA also works in partnership with the police on a Vehicle Recovery Scheme (VRS), which allows finance companies to recover cars they own that have been driven illegally by a finance customer and have ultimately been seized by the police. The VRS has led to £4 million worth of illegal vehicles being taken off the UK’s roads in 12 months.
Paul Harrison, Head of Motor Finance at the FLA, said:
“A third of motor fraud cases involved customers selling their car without settling their finance agreement in full. This is known as conversion fraud and it has become a bigger problem during the recession. In some cases, customers are not aware that they are not the legal owners of their car and do not realise that selling it is fraud. The finance company remains the owner of a car until all outstanding finance has been paid. At this point, a lender will generally transfer legal ownership to the customer and he/she can then do what they want with the car.
“Anyone having trouble making repayments should immediately contact their lender to discuss their situation. Lenders are keen to work with customers to agree alternative payment plans whenever possible.”
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Note to editors:
The FLA is the leading trade association for the motor finance sector in the UK. In 2009 FLA members financed £72.5 billion of new business. FLA members provided £16.5 billion of motor finance in 2009 and financed more than 46% of all new car registrations in the UK.
The ACPO Vehicle Crime Intelligence Service (AVCIS) is a national police unit dedicated to investigating and recovering fraudulently-obtained vehicles, and prosecuting offenders. The FLA has sponsored the Vehicle Fraud Unit of AVCIS since September 2007. Acting as the eyes and ears for the police, contributing finance companies are able to report suspected fraudulent cases to the unit for investigation and recovery.
The Vehicle Recovery Scheme was launched on 1 September 2009, after a successful pilot scheme, and allows enrolled police forces to notify finance companies when they have seized a car which is owned by that lender. Almost 180,000 vehicles a year are seized because they are driven without insurance. Driving a car on finance without insurance invalidates the finance deal.
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 766993