Motor fraud cases have caused losses of £3.8m in the first quarter of 2009, with application fraud accounting for 40% of all cases.

But motor lenders prevented £36.5m of fraud in the first three months of this year, said the Finance and Leasing Association (FLA).

There were 207 fraud cases reported in quarter one despite 3,500 cases of attempted or suspected finance fraud over the same period.

The vast majority of fraud occurs in large towns and cities, said FLA. There is a regional split with 20% of fraud reported in Greater London and 10% in Greater Manchester.