Fall in motor finance fraud

Instances of motor finance fraud dropped 27% between the first quarter of 2011 and the same period in 2012, according to data from the Finance & Leasing Association.

Overall in the first quarter of 2012 there were 169 recorded instances of motor fraud worth roughly £2.4 million of outstanding finance on the vehicles.

There were 1,687 attempts at frauds worth £20 million that were halted at the application stage in this same period by lenders and dealers.

The most frequently attempted fraud was "first part fraud", whereby someone hires their vehicle out for profit, or asks for credit on behalf of another person without telling the finance firm, or generally misuses their credit account.

This equated to 37.3% of all instances of fraud, while selling a vehicle still on finance (called 'conversion' fraud) made up 34.3%. People committing falsehoods on finance applications occurred in 21.3% fraud cases.

The FLA's head of motor finance, Paul Harrison, said: "The hard work of lenders and dealers to prevent motor finance fraud resulted in £20 million of savings in the first quarter of this year.

"The downward trend in motor fraud reflects the rigorous application of lending criteria by finance companies and the use of the array of anti-fraud tools at their disposal. The motor industry continues to take the fight to fraudsters."

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