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Car finance fraud is lowering

Happily, the Finance & Leasing Association (FLA) has posted new figures that suggest car finance fraud is not as successful as some may think. According to the FLA, only 8.7% of attempted motor finance frauds are successful.

Happily, the Finance & Leasing Association (FLA) has posted new figures that suggest car finance fraud is not as successful as some may think. According to the FLA, only 8.7% of attempted motor finance frauds are successful. Even better, of those that do succeed, a staggering 44% of the cars involved are recovered by the lenders.

The FLA’s report shows that during the second quarter of 2010, there were 2,361 fraud cases involving car finance. The figure shows a 5% drop of fraud cases compared to the first quarter of last year.

Paul Harrison, Head of Motor Finance at the FLA, stated: "A third of motor fraud cases involved customers selling their car without settling their finance agreement in full. This is known as conversion fraud and it has become a bigger problem during the recession. In some cases, customers are not aware that they are not the legal owners of their car and do not realise that selling it is fraud. The finance company remains the owner of a car until all outstanding finance has been paid. At this point, a lender will generally transfer legal ownership to the customer and he/she can then do what they want with the car.”

He continued to say: "Anyone having trouble making repayments should immediately contact their lender to discuss their situation. Lenders are keen to work with customers to agree alternative payment plans whenever possible."

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