U.K. Vehicle-Finance Fraud Cases Decline in Q1 2012

There were 169 recorded cases of vehicle-finance fraud in the U.K., involving about £2.4 million ($3.7 million) of outstanding finance on the cars involved, in the year’s first quarter.

But the Finance & Leasing Assn., the country’s motor-finance trade body, says the number of cases was down 27% from year-ago and dealers and lenders stopped 1,687 attempted frauds at the application stage, saving the industry more than £20 million ($31 million).

First-party fraud, where a person either hires his car out for profit, applies for credit on behalf of someone else without informing the finance company or otherwise misuses his credit account, was the most common type of fraud, accounting for 37.3% of all cases.

Selling a car still on finance, known as conversion fraud, accounted for 34.3% of cases, and 21.3% involved people lying on their finance application.

“The downward trend in motor fraud reflects the rigorous application of lending criteria by finance companies and the use of the array of anti-fraud tools at their disposal,” association head of motor finance Paul Harrison says in a statement.

Association members provided £19.8 billion ($29.2 billion) of motor financing last year and financed more than 64% of all private new-car registrations in the U.K.