Motor finance firms triumph over attempted fraud

The motor finance industry has successfully reduced the number of motor fraud cases by 35 per cent, despite increased efforts by fraudsters to acquire cars illegally.Motor lenders prevented £36.5 million of fraud in the first three months of 2009. New figures from the Finance & Leasing Association (FLA)– the representative body for lenders who provide car finance to consumers – show that only 207 actual fraud cases were reported in Q1 2009 despite the 3,500 cases of attempted/suspected motor finance fraud detected by FLA members over the same period.Fraudulent deals caused losses of £3.8 million in the first quarter of 2009, but with an increasing number of motorists choosing motor finance to purchase their cars, the industry is taking extra care to beat potential fraudulent applications. Application fraud was the most common type of fraud, accounting for 40 per cent of all cases.The FLA figures show that the vast majority of fraud occurs in large towns and cities.  There is a strong regional split, with 20 per cent of fraud reported in the Greater London area and 10 per cent in the Greater Manchester area.Motor lenders are being extra vigilant to tackle vehicle mileage ‘clocking’. This is where a vehicle’s mileage is tampered with to improve its value or avoid obligations under a finance agreement .Commenting on the latest figures, Paul Harrison, Head of Motor Finance at the FLA, said: “The motor industry is working hard to keep costs down and provide attractive finance deals. Lenders are being particularly vigilant in a recession when there tends to be more opportunistic fraud. Applications are being scrutinised and vehicles are checked for ‘clocking’. In the first three months of the year this has saved over £36 million.”

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