While identifying and verifying the customer’s identity ensures lenders and dealers are meeting their AML obligations, these checks do not always prevent sophisticated impersonation fraud – where fraudsters steal the identity, and other credentials, typically from individuals with good credit records to gain access to finance and a vehicle.
There are higher risks of impersonation and other types of fraud where the sale of the vehicle and finance is undertaken at a distance without any face-to-face contact with the customer. Online and telephone sales, click and collect and vehicle delivery service channels have become commonly used approaches of buying and selling vehicles. The key risks include:
- Sales process – the true likeness of the customer cannot as easily be checked against their identity documentation compared to a buying process in a showroom.
- Delivery services – vehicles may be delivered in a contactless way to impersonating fraudsters.
- Part exchanges – lighter checks on part-exchanged vehicles may lead to the acceptance of cloned vehicles (where a stolen vehicle has been fitted with a different number plate/VRM to avoid detection).
Measures to prevent fraud
The National Vehicle Crime Intelligence Service (NaVCIS) – a police unit specialising in the detection and prevention of vehicle crime – suggests that taking these steps will significantly help to prevent fraud:
- Customer photo – obtaining a selfie or taking a photo of the customer, in addition to obtaining a copy of their photocard driving licence, will deter fraudsters and enable enhanced checks to be made that reduce the risk of impersonation fraud.
- ID customer on delivery – requesting that delivery agents take a photo of the customer’s ID, or at the least undertake a visual likeness check of the customer based on a photograph or photo ID provided through the sales process.
- Confirm the customer resides at the delivery address – ensuring that delivery agents are satisfied this is the case.
- Challenge requests to deliver to third parties – only the customer should receive the vehicle. Any requests for delivery to be taken by someone else or to a different address to the customer’s should be investigated before the vehicle is released, or the request should be rejected at the outset.
- Fully check part-exchanged vehicles – ensuring the vehicle’s VIN plates are checked against the V5C provided by the customer and/or vehicle provenance report.