Fraudulent car loan applications rise sharply

Since the start of 2008 there has been a dramatic increase in the number of people attempting to obtain car finance fraudulently, according to analysis from Experian, the global information services company.

The number of fraudulent car finance applications detected during Q1-Q3 2008 rose by 30.4 per cent, compared to the same period in 2007. Since the beginning of the year, motor finance fraud has totalled £39.3 million.

Kirk Fletcher, Managing Director of Experian's Automotive division, said: "The high value nature of vehicles makes the automotive industry a prime target for fraud.

"Over the last 18 months, financial services providers offering loans and mortgages have been tightening their lending criteria. As a result, fraudsters have been turning their attentions to the automotive market and this is reflected by the huge increase in fraudulent car loan applications this year.

"Most recently, applications for car finance have begun to slow down and August and September saw a drop in activity. Despite this, fraudulent applications have still continued to rise."

"In today's tough trading environment, automotive businesses need to focus on mitigating their exposure to risk and the latest fraud detection and prevention technologies support the sales process when quick decisions on car loan applications are needed. Tools such as Experian's AutoCheck, Asset Event Manager and Hunter II provide instant information in real time."

Over the last four years, the total number of fraudulent applications for car finance has increased by more than four and half times, representing a total value of over £147 million.