Motor finance fraud up almost 50 per cent in two years
Monday, December 17, 2018
New figures show that over the past twenty four months there has been a sharp increase in motor finance fraud.
According to industry specialists the concern for car dealers is that, unfortunately, this has vast potential to rise further as more consumers finance vehicles online and opt for PCP (personal contract purchase).
An article in Motor Trader reveals that car dealers are faced with two key challenges when it comes to combatting financial crime. The first is fraudsters are becoming increasingly sophisticated and the second, consumers are demanding quicker financing. Together, these factors can compromise proper identity screening and customer verification.
Evolutions in technology mean fraudsters can more easily commit identity fraud. Either via phishing to con people out of sharing personal data, hacking to steal data or simply pulling information from social media, fraudsters can quickly assume someone else’s identity or create an entirely false, but realistic, application profile.
These identities are then used to acquire vehicles, which are often resold abroad. Research from Synectics Solutions shows that identity fraud accounted for 15% of motor finance fraud in 2017, up from just 5% two years earlier.
However, it is not just the risk of identity fraud that’s a problem for dealers, it’s the exploitation of ‘faceless’ online applications. Fraudsters use the speed of the internet to repeatedly make a high volume of applications. This game of numbers has also evolved as, rather than walk away if the application is unsuccessful, they’ll change some details in the application such as the level of borrowing and then reapply.
The speed of financing is paramount to success. Dealers know consumers shop around and are influenced by quick decisions. This is driving demand for anti-fraud solutions that enable real-time and reliable screening of applications.
With vehicle financing moving more online and consumers becoming more ‘invisible’ during applications, dealers need to ensure they have instant access to accurately verifying customers to mitigate the risks of fraud, while satisfying demand for quicker financing.
We know that often fraudsters use the identities of people that have died as these details are easy to come by and the fraud tends to go undetected for longer. It is therefore clear that car finance firms need to protect themselves by integrating a solution such as Halo which will identify any finance applications made using the personal information of someone that is deceased.
For further information on how to stop deceased motor finance fraud please don’t hesitate to contact us.