Do you really know your customer?

OVER the last 18 months there has been a significant increase in the instances of impersonation fraud against financial institutions including those within the motor finance industry, writes Paul Sperring, fraud manager at Lloyds Banking Group.

As a business, Lex Autolease has been proactively engaged to protect the business against fraudsters, including organised crime groups committing identity fraud. Since the beginning of lockdown, more and more customers are either buying vehicles or leasing them without going to dealerships and there has been a marked shift to acquiring vehicles online. As a result, this move also puts the leasing industry at a higher risk of fraud.

Across my 35 year experience of investigating fraud, I recognise that the advent of digital technology, whilst enhancing customer journeys, has also made it easier for fraudsters to access credit and in the case of our industry, obtain vehicles through impersonation fraud.

Members of the public are able to upload information on to various websites and very quickly discover whether or not they are acceptable for credit. However, fraudsters are also able to do this and ‘test’ details of innocent members of the public accessed perhaps via the ‘Dark Web’ or through documentation which is easily available on the internet.

The business of fraudulent documentation

Fraudulent documents can be purchased online or can be produced using high quality printers. The relevance is that in the majority of cases where a customer applies for finance, leasing companies require proof of address, bank details, employment details and the like. Normally proofs will be sent to leasing brokers by the prospective customers via email.

Those proofs could include driving licences, bank statements, passports and so on, but how do you know if they are real? How do you know if they haven’t been altered? How do you know if the person who is sending you that email is in fact the person whose name appears on the application?

As a Fraud Department we have not only been training our internal staff on how to identify fraudulent documents but are also supporting brokers who are the front line of defence against fraudsters.

Although it can be difficult to identify fraudulent documentation, with quality training many fraudulent documents can be identified before a deal is paid out. The message is to closely check documentation that is being provided.

By way of example, the format of information on UK driving licences can be checked using various applications on the internet. Pay particular attention to the different styles of licences issued by the DVLA and compare the issue dates of the licence to the dates the different styles of licence were valid. If it does not look right, double check it.

Pursuing the fraudsters

As an industry we continue to develop our ability to identify fraudulent documents and to protect ourselves against fraudsters. But we should not and indeed do not stop there.

When we identify a fraudulent application, which we believe is an impersonation fraud, it is important to confirm this with the potential victim and to actively seek the assistance of law enforcement to apprehend the offenders. It is often the case that once the fraudsters are apprehended, this leads to the identification of other offences across the country with other finance companies, and can contribute to the identification of larger ‘Organised Fraud Groups’. Prevention is the key as once a vehicle has gone, the likelihood of recovery diminishes the longer it takes to identify that a fraud has been committed.

From our own experience, this active engagement with various police forces across the country has resulted in arrests of offenders attempting to collect our vehicles and has assisted Police with their other enquiries into organised crime. One particular offender is suspected of committing over 200 offences.

The message is clear, if you have any suspicions at all that the applicant is not genuine and the documentation may be fraudulent, let the lender know.