Reducing risk is a subject
that never fails to attract attention. Now, a leading independent
auditor is setting up a user group to share best practice and help
reduce the risk of fraud. Claire Hack reports.
Go deeper with GlobalData
Richard Jewitt, head of the vehicle audit division of
Orpington-based OCS Inventory and Audit Services, works with 22
major manufacturers or their subsidiary funders, visiting
dealerships on clients’ behalf in order to ensure full compliance
with funding terms for inventory and stock finance.
Jewitt and his colleagues are now
setting up a user group, focused on sharing best practice in order
to reduce the risk of fraud, he said, in order to work towards
“risk mitigation” for clients.
According to Jewitt, owing to the
mobility and high value of cars, it is relatively easy for a
dealership owner to convertms of pounds’ worth of stock to cash by
selling it without repaying the funder, meaning opportunities for
fraud are rife.
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 GlobalDataJewitt said: “We check the cars
that are funded are actually on the forecourts of the dealers.”
He added: “It will be about getting
people together to look at the software we provide to see whether
there are any recommendations or enhancements they would want.
“It will also be to talk about
benchmarking so that we can all be singing off the same hymn
sheet.”
Varying standards
For example, he said, some audit
teams may make only “sample” physical checks on dealerships – a
practice he believes to be insufficient.
“It could be very invasive to do a
full check but there’s really no excuse for not doing a 100%
physical audit,” he said.
“If you can kick the tyres, it
exists.”
It is necessary, furthermore, to
make sure auditors communicate with one another and even
occasionally carry out audits together, he added.
“It’s a matter of trying to get to
know when other people are going into dealerships common to
everyone so we can go in together,” Jewitt said.
SMART software
OCS has developed its own software,
known as SMART (Stock Management and Reconciliation Technology),
which can be used on PDAs, and can then send information from an
audit report direct on a dealership to the OCS’ server so that its
clients will have access to it online.
Jewitt said: “The information
generated is reconfigured into a number of reports which funders
can access via our website.
“They can get into the report as
soon as the audit is finished.”
The automated system also allows
OCS to integrate all vehicles funded by used overdraft, potentially
giving access to up to 90% of all registered funded stock in the
UK.
Jewitt said: “It gives the option
to data match and reduce the risk of clients’ exposure to issues
like dual funding or suspect vehicles.
“It means if any rogue vehicles are
thrown out we can investigate on behalf of the funders.”
Those invited to take part in the
user group will not just be partners that work with OCS, Jewitt
said, but will represent a broad spectrum of funders with in-house
audit teams.
More importantly, they will also be
those working “on the ground” rather than higher up within the
echelons of each company.
Jewitt said: “It’s the people who
are involved with deals – the ones we work with on a day-to-day
basis.
“It won’t be the guys at director
level.”
First of its kind
A spokesman for the Finance and
Leasing Association (FLA) added that the regulatory body is
currently not operating any similar schemes.
He said: “I’m not aware that we’re
doing anything of that nature at the moment but we would be happy
to hear about it.”
The user group will not, Jewitt
emphasised, be about “sharing trade secrets” but could present the
company with an opportunity to offer its services to funders with
overstretched in-house teams.
He said: “The UK is an enormous
chunk of land, with companies looking after their entire dealer
network with just five or eight auditors.”
The vehicle audit division at OCS
currently holds about 35% of market share, while another major
independent auditor – although Jewitt did not reveal which one –
holds a further 35%, and the rest is split among companies with
in-house teams.
While the majority of the
department’s work is with car dealerships, it also provides
services for commercial vehicle, caravan, motorcycle, marine and
plant machinery auditing.
OCS has been in the vehicle audit
market since 1991 when Jewitt established the division, which now
has a team of about 60 auditors.
The company is the largest
independent auditor in Europe.
Jewitt is hoping to hold the first working group later in the
year as a “fact finding” exercise with a view to holding a second
one on the basis of the outcome.
