A warning has been issued by the Finance and Leasing Association (FLA) regarding providing false information in finance applications, or selling a car that has outstanding finance. The FLA has published new details that show that there were nearly 2,500 fraudulent motor finance applications in the first quarter of 2010, and are alerting customers who may not realise they are committing a serious crime.

The FLA also reported that, in the year to March, there were nearly 10,000 attempted fraudulent applications to motor finance providers, amounting to GBP126.8 million. However, the rigorous checks undertaken by finance companies managed to keep the amount of actual cases down to 960, worth a total GBP15.8 million.

There was a slight decline in fraud in the first three months of 2010 compared with the same period a year ago, but the figures reveal that an increasing proportion of fraud may have been committed by car buyers without their knowing it. Just under a third of motor finance fraud in the past year was fraud on the application form, where incomplete or inaccurate information has been provided to a lender. Just as common was conversion fraud, which involves the fraudulent sale of a vehicle that does not belong to the seller.

Paul Harrison, who is Head of Motor Finance at the FLA said Finance companies continue to work closely with police to combat finance crime, but it is vital that consumers are made aware of how fraud could affect them. If they fail to disclose their credit history during the application process or try to sell a vehicle that is still on finance, they are committing fraud against their lender and may have their car taken from them.