Motor finance fraud cases fell 14% in 2010 despite more cars being sold on finance than in the previous year, according to the latest quarterly report from the Finance & Leasing Association (FLA).
The value of motor fraud cases overall in 2010 was £14.6 million, down by 13.5% on last year’s value. There were 832 cases of motor fraud in 2010. The reduction reflects the commitment of lenders to tackle financial crime and keep credit affordable.
While 832 cases of fraud slipped through lenders’ checks, FLA member finance companies prevented over 9,000 cases of suspected or attempted fraud in 2010 and therefore avoided at least £116 million of fraudulent losses.
Motor finance companies recovered 40% of all cars acquired through fraud thanks to their own investigations and to partnerships with police forces, including the industry-funded ACPO Vehicle Fraud Unit1. Now in its fourth year, the Vehicle Fraud Unit has recovered over 900 vehicles worth £15.5 million. While Government funding for the ACPO Vehicle Crime Intelligence Service has been cut, the Vehicle Fraud Unit itself is funded by FLA members and can therefore continue to operate.
Paul Harrison, the FLA’s head of motor finance, said: “Motor finance fraud was down 14% in 2010 as a direct result of lenders and motor dealers carefully scrutinising credit applications before approving deals. It is near impossible to prevent all fraud – particularly as some cases only come to light after credit has been granted – but industry continues to work hard to stay ahead of fraudsters.
“Even if a fraudster manages to acquire a car on credit, our industry has a good vehicle recovery rate. Car fraud funds organised crime and FLA members will continue to support the police by funding the Vehicle Fraud Unit. We hope that the Home Office will be able to find alternative funding streams for the rest of AVCIS.”