Impact on vehicle finance theft and fraud in the current economic climate


Anecdotally, there is; maybe more of an assumption than a fact, a view that finance agreement related crimes are likely to rise in the current economic climate. The recently appointed chief inspector of constabulary Andy Cooke may well concur saying “The impact of poverty and the impact of lack of opportunity for people, does lead to an increase in crime.

There’s no two ways about that.” By finance agreement related crimes, I am referring to situations where the customer either fraudulently takes out an agreement on a vehicle without any intention of making regular payments and sells it or at a point where numerous repayments have been made, chooses not to pay any more and disappears with the vehicle, using it for their own use or selling it on.


Current Position

Post pandemic and the end of the moratorium on lenders not to undertake repossessions we are beginning to see a significant uplift in motor vehicle finance crime where the elements of theft and fraud can be established. Perhaps of greater concern is that we are seeing a greater prevalence of vehicles with a hire purchase, lease or rental provenance being used to facilitate organised crime. This is mirrored by Interpol; “For organized criminal groups, the acquisition, shipment and trade of stolen vehicles is a low-risk way to make profits. Stolen vehicles are frequently trafficked in order to finance and carry out other criminal activities, ranging from drug trafficking, arms dealing, people smuggling and international terrorism. [Interpol bulletin on vehicle crime] There are clear benefits to stealing a vehicle through the exploitation of a finance agreement. You get the keys and the logbook without the risks of having to physically remove it, such as burgling premises and stealing the keys.


Vehicles unlawfully exported

The UK’s withdrawal from the Schengen agreement following Brexit raises additional problems. Stolen vehicles entered onto the Police National Computer [PNC] having been previously automatically circulated on the Schengen Information System, no longer are. The current position is that vehicles are now circulated to foreign jurisdictions via the ASF Interpol database, which we understand is a more onerous, bureaucratic and a less efficient system. Outside the sphere of organised crime, there is a strong link with lower level criminality conducted by those who have dishonestly exploited a finance agreement. This may be drug dealing, dishonesty, driving a vehicle driving without insurance and other road traffic offences etc. Figures show that over a 12-month period, consumers using finance purchased 1.49 million used cars. That’s potentially a large number of hirers who either cannot maintain regular payments and some of those who have no desire in returning vehicles when requested. Although one the key preventers in engaging in financial services crime per se is the likelihood of a detrimental impact on one’s credit record, we are seeing the emergence of “New Skin” related fraud, where a person with a good credit record is coerced or conned into acting as a mule and obtaining a vehicle on behalf of another who later makes off with it leaving the mule to face the consequences. As more people become indebted, the opportunity to “earn” easy money may become more attractive. More often than not vehicle finance agreement related crime occurs where relations between the lender and the customer have broken down resulting in the customer refusing to return the vehicle and in some cases selling it on to realise the proceeds. Increasingly we are seeing push back from police when reporting vehicle finance related crimes as thefts. On occasions at the point of reporting; convincing officers that vehicle finance related crimes are indeed crimes and not for pursuance through civil remedy can be quite a challenge. The result of police taking little or no action in respect of vehicle finance related crimes could over time de-criminalise the process and we may see an uplift in offending where there are no consequences for the person committing the crime. At Legate, we can call upon the collective expertise of staff who have varied investigative backgrounds in both the finance and law enforcement sectors. We know the arguments and make compelling representations to police forces across the UK ensuring crimes are properly recorded and investigated. Along with a high level of industry knowledge and unique skill sets, this has influenced our continued success locating and recovering vehicles on behalf of clients not only in the UK, but in Europe and globally.



There is a view that both regulated agreements and non-regulated vehicle contract leases will be greater impacted by economic downturn. Organisations that cease trading and make staff redundant may have company vehicles that are not returned or dishonestly sold on by disgruntled former employees. This may lead to an increase in reported offences. It is possible that post pandemic, in a world with economic instability, exacerbated by a perceived lack of cohesion between UK and European law enforcement agencies, could well create an environment for organised crime to flourish. Lenders and others in the vehicle finance sector may increasingly find themselves the victims of crime. This can be mitigated by proper due diligence and record keeping at the inception of the account along with a robust recovery strategy supported by companies such as Legate that have a bespoke skill set to locate and recover your vehicle.