Scammers are targeting car leasing customers and challenging the industry’s reputation. Christopher Marchant looks at a recent internet-based fraud raised by the BVRLA.
The BVRLA has recently raised awareness of a scam found on social media and across the web. Fraudsters are posing as BVRLA members, and offering finance without credit checks. The fraudsters then persuade the unsuspecting customer into giving a deposit for a non-existent vehicle.
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BVRLA chief executive Gerry Keaney has spoken about the risks this scam poses, and what the industry should be looking out for to prevent this kind of fraud. The first obvious sign of fraud is the offer of financing a car without credit checks, a violation of Financial Conduct Association (FCA) regulations and something that would not be offered by legitimate brokers.
Keaney explains: “We have seen evidence of customers being provided with bank account details by direct message and asked to transfer a deposit.” Use of social media, especially Instagram, shows how online scammers have evolved in recent years to target a younger, often more tech-savvy demographic.
Keaney explains that the temptation of using social media channels is that “they can provide an instant response mechanism”. The unsuspecting consumer may have put down what they thought was a deposit on a vehicle without time to analyse the deal, or discuss it with experts or even the people around them.
Social media in this sense differs from email ‘phishing’ scams, with the instant messaging features found on sites such as Instagram, Facebook and Twitter speeding up the process, and therefore making them particularly beneficial to fraudulent behaviour.
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By GlobalDataDirect messaging also bypasses any requirement for the scammer to host a website, reducing the digital footprint and the likelihood of being traced by criminal investigators.
The BVRLA is aware of the seriousness of the issue, and has referred cases of this kind of growing fraud to the FCA for investigation. Of particular concern is that the scam is clearly aimed at subprime consumers who are unable to get financing through licensed channels.
As Keaney notes: “These criminals are purposely targeting the vulnerable, scamming money from people who can least afford to lose it. It’s deplorable. Their adverts can appear very convincing, with some even posing as BVRLA members and citing membership numbers of legitimate members.”
Keaney urges consumers unsure about the leasing broker with which they are getting a finance deal to contact the BVRLA directly; the BVRLA would then be able to verify. The social media scammers also use the guaranteed-financing option, offering vehicles dependent on customers handing deposits that could total thousands of pounds. The fake deposit scam advertised on social media operates entirely independently of broker services.
It is, therefore, a separate issue from yo-yo or spot financing, where brokers offer finance to consumers subject to approval. On the social media financing fraud, Keaney makes clear: “We want to get the message out there that all legitimate leasing brokers adhere to FCA rules, and will carry out credit and affordability checks. Those who do not will not be legitimate traders, and could be out to scam you.”
If the fraud continues, it could tarnish legitimate BVRLA-registered brokers, as consumers may be led to believe they have been swindled by brokers who were in fact registered with the organisation as reliable.It could also affect trust in online financing as a whole, with consumers reluctant to enter into an agreement if there is even the remotest possibility of being defrauded.
National fraud and cybercrime reporting centre Action Fraud has also been informed of the scam, and released the following statement: “The BVRLA is telling people to think twice before responding to any adverts that promote vehicle leasing deals that require ‘no credit checks’, promote ‘no deposit’ and ask people to ‘direct message’ via text to get the deal.”
