9:21 am, December 18, 2012
‘CONVERSION’ fraud – when a vehicle is sold as though it isn’t on finance – remains the most common type of finance fraud.
Research by the Finance and Leasing Association reveals that conversion fraud is still growing – meaning buyers still need to beware.
The FLA points to tough economic conditions for keeping fraud levels reasonably high, with many customers selling the car quickly to free up cash in an emergency.
It’s those that fail to fulfil their responsibilities and repay the loan in full that cause issues, though – as the FLA says, ‘until the loan is paid off in full, the car is not theirs to sell’.
Fraud is down as a whole, though – 747 cases were recorded last year, some 11 per cent less than the year before – and representing a ‘very small’ proportion of the total number of finance agreements taken out.
Paul Harrison, head of motor finance at the FLA commented: ‘A finance company remains the owner of car until the final repayment is made. Any breach of contract – such as selling the car to someone else – could result in a case being referred to the national AVCIS Vehicle Fraud Unit for investigation.
‘The good news is that the reduction in fraud cases during the past 12 months means that fraud only affects a very small proportion of total motor finance agreements. This demonstrates that the work of the FLA’s members in combatting fraud is paying dividends.’
