Lenders Get Tougher Over Finance Applications

Monday, 24. October 2011

It seems that lenders in the vehicle finance sector are becoming more anal in the way that they are transacting business, requiring more information than ever before when applications are made in company names and becoming very tough about complete information and proofs when it comes to personal applications. This has led to customers getting very upset over what appears to be unnecessary work for the sake of someone at the finance company being bloody minded.

Of course I have sympathy for those that are required to provide more information than ever before, it gives me more work to do for each application but I also understand the reasons.

Firstly there is the large increase in fraud. With the sophistication of modern technology the lenders have seen a huge increase in fraudulent applications and with average new car prices being over £15,000 I guess it’s understandable that lenders want to make sure that cars are not being supplied to dubious characters who immediately clone the cars and sell them on.

Identity fraud is also on the increase but as one lender pointed out, when I recently complained about the amount of extra work involved and the emphasis now placed upon proofs, ‘How would your clients feel if, as a result of not being very diligent when processing applications, their identity was cloned leaving them liable for a car finance debt.’

Of course if an identity was stolen it would be sorted out but I personally wouldn’t want to have to get involved in sorting it and unravelling the contract, so a point well made.

There is also the EU Consumer Credit Directive which has left most lenders scratching their heads trying to work out how it affects them with lenders coming up with completely different conclusions.

Hence the belt and brace exercise introduced by many – just to be on the safe side. So whilst I hate having to ask for more information and proofs from clients I can understand why it has happened so please don’t shout at me because you now know the reasons also. By Graham Hill