Motor dealers are being targeted in a new ‘clearance fraud’ scam, involving vehicles that may have an outstanding finance agreement on them, according to cap hpi.
Scammers deliberately target sellers who are trying to sell a vehicle with an outstanding finance agreement. The scammer will then sell the vehicle on to motor dealers who believe the car to be clear of any finance.
Wendy Swaine, head of retail at cap hpi, warned: “This is a particularly worrying trend that both customers and dealers need to be aware of. Unsuspecting motorists looking to sell their cars are being deliberately targeted by criminals who are able to tell that the vehicle is on finance.
“The financial implications for dealers could be very serious as they can potentially find themselves landed with a car on which finance funds have not been cleared, meaning that the car cannot be legally sold on.”
Cap hpi said the scam also has serious implications for the trade, with dealers receiving the vehicle having not been able to detect any finance fraud until it’s too late.
Swaine continued: “We are working to spread the word to dealers to be on notice for this type of fraud and ensure they have completed the necessary due diligence and checks before acquiring any vehicle such as checking the finance annotations on the vehicle.”
The scale of the clearance fraud is unknown, according to cap hpi, but there have been over a dozen reported cases in London in recent months and one more recently in Scotland.
The scam is the latest in a series of elaborate vehicle frauds ranging from clocking and cloning to hire car scams and ringing, which cost the motor industry hundreds of millions of pounds every year, says cap hpi.