Motor finance fraud cases rose by 17% in the
first three months of the year compared to Q1 2010, reports the
Finance & Leasing Association (FLA), mostly due to an increase
in ‘first party fraud’, where customers take out car agreements on
behalf of other drivers, or ‘sub-hire’ financed vehicles. First
party fraud accounted for 45% of fraudulent activity in Q1.
Sub-hiring is where fraudsters take out credit
for a car in order to profit from hiring it to other drivers who
are often complete strangers. This is illegal because the finance
company remains the legal owner of the car until the finance is
paid off – and it has only approved the customer who applied for
credit to drive the vehicle.
Go deeper with GlobalData
The total value of motor fraud cases in Q1 was
£3.8m, up 13.8% on Q1 2010. There were 230 motor fraud cases in the
first quarter, and 865 in the year-to-31 March 2011.
FLA member finance companies prevented more
than 2,000 cases of attempted fraud in Q1, preventing at least £26m
of fraudulent deals. The vehicle recovery rate was 46%.
The FLA claims its anti-fraud activity reduces
finance costs for honest buyers and promotes road safety by
tackling illegal motoring and organised crime using sub-hiring as a
funding stream for other offences. FLA head of motor
finance Paul Harrison said: “Sub-hiring is not a new
phenomenon, but is a problem that has grown in recent months. It’s
important that when you apply for a car on finance that you advise
your dealer if anyone else will be driving it, and that during the
life of the agreement you remain in possession of the car at all
times.
“As part of this week’s national Car Crime
Awareness week, we are again telling car finance customers about
their rights and how to protect themselves against being the victim
of fraud. A key aim of the campaign is to let organised criminals
know that not only are most attempted frauds detected and stopped,
of the ones that do get through, many vehicles are recovered and
removed, and arrests are made.”
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData
