Finance Fraud is an increasing Issue
- More than £500m was stolen fraudulently from UK bank customers in the first half of 2018
- One in five (22%) people suffered from credit card fraud last year
- Application fraud in motor finance increased by 47% between 2015 and 2017.
- 305,564 instances of fraudulent conduct were recorded by fraud prevention service CIFAS in 2017
Across financial services fraud is a growing issue and motor finance has seen a notable increase in recent years with criminals making fraudulent car finance applications using fake documents and identities to acquire and steal vehicles.
Financial fraud and identity theft are a sad reality; both have broad implications causing financial loss and distress for consumers and losses for financial services companies, something which inevitably results in higher costs for all.
Every motor finance provider is working to address fraud and inevitably this will, on occasion, result in slower response rates as additional checks are undertaken on suspicious applications. This may create some frustration in the showroom, but as Mann Island Finance MD John Hughes reflects, it is an important step that can help a dealer in the longer term;
“We understand the desire for fast financing by our dealers and their customers, but it is essential that if there is any doubt in an application, we take the extra steps needed to verify it.
“I’m sure dealers will understand that if we help an innocent consumer, who has no idea their data is being used fraudulently to try and finance a car purchase, to avoid being the victim of fraud, then they will have won a potential future customer and ‘raving fan’ as well as avoiding the time and costs associated with the fraud itself.”
The challenge to address fraud is an evolving one, most especially with the increasing move to online car finance application. Fraudsters can make multiple applications quickly using identities stolen or developed from a range of platforms including social media and distressingly from people who have recently passed away. Online these applications can be shrouded in invisibility.
Hughes concludes; “Fraud detection is evolving and I’m happy to note that two-thirds of all attempted frauds are detected and therefore avoided. Finance companies are not the only potential targets of these frauds and all dealers need to be on their guard for suspicious potential car buying activities as well. To conclude, sometimes, a dealer may have to wait a little longer for a decision, but on those very few occasions if we do identify a fraudster, I’m sure those dealers will understand.”