Motor fraud cost lenders a total of £2.9m in the second quarter of this year, a drop of 0.8% on the same period in 2010, the Finance and Leasing Association (FLA) has revealed.There were 195 cases of motor fraud in the second quarter, and 835 in the last 12 months, a fall of 12% on the previous 12 months, the FLA revealed, while nearly 30% of motor finance fraud committed in the last year was done by using false finance applications.
FLA member finance companies detected over 2,100 motor fraud cases in the second quarter while working with a dedicated police Vehicle Fraud Unit, which prevented £26.8 million of fraudulent deals.
Currently, only one in every eleven fraudulent applications is successful, and as a result fewer than 250 cases of undetected application fraud have slipped through the net in the last year.
Paul Harrison, FLA head of motor finance, said: “Application fraud increases in tough economic conditions as people know that it can be difficult to get finance if they have a poor credit history, or an unsteady source of income. But exaggerating their income, hiding previous addresses or giving false employment details to improve their chances of getting a car on finance is fraud and will be reported to the police.”