Saturday, April 25, 2009
Auto lenders hit fraudsters hard
As the Government prepares to launch a three-year National Fraud Strategy on May 5, the Finance & Leasing Association reports prevention of losses to criminals totalled £123 million in the final quarter of 2008 – a 36% year-on-year improvement.
The FLA says that when a member receives a finance application from a dealer it undertakes extensive background checks to establish the customer’s existing commitments.
Underwriting teams compare information provided by a customer with the enquiry documentation to ensure consistency. Customers may be asked supplementary questions before a final decision is made.
Stephen Sklaroff, FLA director general, said the National Fraud Strategy was to be applauded.
“Fraud often increases in a recession,” he said. “Motor finance companies have already created a partnership with the Association of Chief Police Officers to investigate and recover vehicles obtained via fraud.”
Sklaroff said that by tackling fraud dealers and lenders could prevent higher costs being passed on to customers so dealers could continue to provide competitive deals.
“It is vital the Government uses the National Fraud Strategy to deliver further action to address financial crime, particularly at a time when businesses and consumers are already struggling with current economic conditions,” he said.
Fraud increases when economic conditions deteriorate because some previously creditworthy customers find it more difficult because of changes to lenders’ underwriting criteria.
Those who break the law provide false information on applications to increase their chances of being approved. Motor fraud is attractive because there is a high-value tangible asset to sell if they are successful.
Chris Sutton, Black Horse managing director, said: “We have encountered more fraud cases as the economic situation has worsened and launched an industry-leading programme of prevention procedures.
“Fraudsters are increasingly inventive. Hiding adverse credit history is still the most common fraud but other ‘hard frauds’ where the deceptions are more deeply embedded pose the greatest threat of loss. ”
DATED: 25.04.09
FEED: AM
The FLA says that when a member receives a finance application from a dealer it undertakes extensive background checks to establish the customer’s existing commitments.
Underwriting teams compare information provided by a customer with the enquiry documentation to ensure consistency. Customers may be asked supplementary questions before a final decision is made.
Stephen Sklaroff, FLA director general, said the National Fraud Strategy was to be applauded.
“Fraud often increases in a recession,” he said. “Motor finance companies have already created a partnership with the Association of Chief Police Officers to investigate and recover vehicles obtained via fraud.”
Sklaroff said that by tackling fraud dealers and lenders could prevent higher costs being passed on to customers so dealers could continue to provide competitive deals.
“It is vital the Government uses the National Fraud Strategy to deliver further action to address financial crime, particularly at a time when businesses and consumers are already struggling with current economic conditions,” he said.
Fraud increases when economic conditions deteriorate because some previously creditworthy customers find it more difficult because of changes to lenders’ underwriting criteria.
Those who break the law provide false information on applications to increase their chances of being approved. Motor fraud is attractive because there is a high-value tangible asset to sell if they are successful.
Chris Sutton, Black Horse managing director, said: “We have encountered more fraud cases as the economic situation has worsened and launched an industry-leading programme of prevention procedures.
“Fraudsters are increasingly inventive. Hiding adverse credit history is still the most common fraud but other ‘hard frauds’ where the deceptions are more deeply embedded pose the greatest threat of loss. ”
DATED: 25.04.09
FEED: AM
