We have seen an increase in the number of customers turning to
motor finance to fund the purchase of a new car. However, as the
sector has grown, our figures have also revealed a significant
increase in the number of fraudulent motor finance applications.
Furthermore, the industry is reporting a leap in the number of
asset conversion cases reported this year (source: CIFAS
[2008]).
Consumers are becoming more desperate to obtain funds and it
appears that many motor finance applications are from people who
already have a lot of unsecured debt and are struggling to keep up
with payments.
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However, in the majority of cases motor finance crime is
more premeditated than opportunistic. One of the trends that
has emerged is where criminals fraudulently buy vehicles in the UK,
as a result of multiple applications for finance, knowing that one
will be accepted, then export the vehicles – once obtained – to
Eastern Europe, Africa and the Far East. There have also been
reports of criminals trying to obtain high-value vehicles through
fraudulent contract hire deals then sub-letting
them.
Financial crime is a big threat to the industry and
companies need to monitor their assets effectively, and take
measures to reduce risks. By doing so, they are in a greater
position to identify current and emerging criminal trends.
The author is the managing director of Experian’s Automotive
division
