In the last 12 months, almost 30% of motor finance fraud was committed using false finance applications.
This is according to the Finance & Leasing Association, which today published motor finance fraud figures for the second quarter of 2011.
The figures show that fraudsters giving false information on their applications to secure car finance are most likely to lie about their employment circumstances, often giving details of bogus companies as their employer. They also show that fraudsters use false home addresses and overstate their earnings to increase their chances of getting credit.
Motor finance companies have become adept at spotting fraud and only one in every eleven fraudulent applications is successful. As a result fewer than 250 cases of undetected application fraud slipped throught the net in the last 12 months.
Motor fraud cost lenders £2.9 million in the second quarter of 2011, which was 0.8% lower than in the same period last year. 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.
Working with a dedicated police Vehicle Fraud Unit, FLA member finance companies detected over 2,100 cases of motor fraud in the second quarter of 2011. This prevented £26.8 million of fraudulent deals.
Paul Harrison, the FLA’s 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.
“We have just entered our fifth year of sponsoring the Vehicle Fraud Unit of the ACPO Vehicle Crime Intelligence Service and have recruited additional police officers to help send a clear message that fraudsters will be prosecuted.”