Motor finance fraud cases fell by 27% in Q1 2012 compared with Q1 2011, according to the latest figures from the Finance & Leasing Association, the motor finance trade body. In total, there were 169 recorded cases of motor fraud in Q1 2012, involving around £2.4 million of outstanding finance on the associated cars.
Lenders and dealers also stopped 1,687 attempted frauds at the application stage in Q1 2012, saving the industry more than £20 million.
"First party fraud" - where a person either hires their car out for profit, or applies for credit on behalf of someone else without informing the finance company, or otherwise misuses their credit account - was the most common type of fraud in Q1 2012. It accounted for 37.3% of all cases. Selling a car still on finance (known as 'conversion' fraud) accounted for 34.3% of cases, and 21.3% of cases were caused by fraudsters lying on their finance application.
Paul Harrison, the FLA's head of motor finance, commented on the figures: "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."