Credit Agency Reports Huge Increase In Auto Finance Fraud

Sunday, 19. September 2010

According to Experian, the credit reference agency, automotive fraud increased by 35% during the first half of 2010. 34 in every 10,000 applications were considered potentially criminal. The majority were recorded in the second quarter showing an upward trend. First party fraud overtook third party identity fraud during April to June as the most common type of attempted fraud. First party fraud is typically where individuals attempt to hide adverse credit history or misrepresent their employment status to try and secure credit and other financial services which might not be suitable for them. Third party fraud is committed against an individual by an unrelated or unknown 3^rd party and generally involves organised criminals and opportunists seeking credit and other financial services using the identity of others. “As our analysis shows, fraud within the UK’s automotive sector is rapidly increasing,” said Nick Mothershaw, Director of Fraud and Identity Solutions at Experian. The increase in can be partly explained by the high value assets that can be easily converted to cash. But the complexity of the sales process is also a factor. For fraudsters this makes it comparatively easy compared with other finance providers. Whilst automotive fraud has seen the biggest increase other types of fraud has also been increasing such as mortgage fraud and current account fraud. What the report hasn’t explained, because it isn’t well known, is that what often appears to be first party fraud, i.e. carried out by the person making the application, isn’t being carried out by the applicant at all but by the intermediary, making the application on his behalf, in order to secure the deal and his commission. Third party fraud is very easy if you are an online arranger of finance. Present a professional website and employ people with an ‘honest’ sounding voice and the next thing you know customers are falling over themselves to provide all the information a fraudster could ever wish for, including copy bank statements and even copy credit cards. So many people accept advertisers on the Internet without any checks being carried out at all. GHA Finance is a member of the National Association of Commercial Finance Brokers. We carry professional indemnity insurance and are also members of the Federation of Small Businesses. Lots of ways to check us out. It is shocking the way that applicants trust companies, they have no knowledge of, with their personal information then wonder why they have all their money removed from their bank accounts and debts run up on their credit cards. You could also lose out if you make a claim on your insurance or claim back the money removed from your bank account as you have been negligent and not taken sufficient precautions to prevent the fraud. Know who you are dealing with and don’t fall into the old trick of attracting potential targets by offering deals customers can’t refuse with an incredibly low rate. Have you been subject to fraud? Please let me know? By Graham Hill