Why is car financing a sector at risk for fraud?
Car financing is a sector highly targeted by fraudsters. There are several reasons for this. The first is that the value of the goods financed means that the scam is quickly profitable. The second is that most automotive players today offer 100% digital journeys. From choice of model to financing, it is perfectly possible to finalize a vehicle order remotely, from your sofa. “ Which makes life easier for good customers, of course, but also for crooks ,” emphasizes Maxence Pruvost.
Finally, the large number of players on the market allows fraudsters to act without attracting too much attention. The latter do not hesitate, in fact, to submit their applications to different places at the same time, thus increasing the probability of seeing their financing accepted.
The creation of a financing file is a prerequisite for its acceptance. The financiers compile different elements to make their granting decision.
“What is complicated for these establishments ,” explains Maxence Pruvost, “is having to analyze the files while not, most of the time, being in direct contact with the end customer.”
Parts are most often collected from the dealership when the vehicle is sold. The files are sent as they are to the funding organizations, without any real verification. Lack of time and training, of course, but also “ because the commercial objectives in dealerships do not necessarily intersect with the issues of file security ”, according to our expert. This is even more true when the intermediary is an online sales or resale site.
The quality of the elements transmitted is therefore variable. Manual processing of a significant volume of requests also does not make the task of analysts easier. “ Sometimes, depending on the season, there are a lot of files arriving at once. Services are under time pressure .”
However, haste never goes hand in hand with efficiency. “ The less time we have, the more anomalies we let slip through, especially since, in most cases, checks are carried out on a sample of files or only on those which represent a high value. ” This is therefore when the risk of fraud is highest: “ crooks take advantage of this opportunity to set up increasingly profitable scams . ”
What are the most common frauds?
Document fraud
Some people are tempted to falsify supporting documents or invent guarantors to be granted credit that they would not have been able to obtain because of an already high debt rate. These are “ small frauds. ” They are difficult to detect with a simple visual check and are most often overlooked in control sampling. The risk for the financier is payment default . This being said, a counterfeit does not mean that the customer will necessarily be a future bad payer. For him it is just a matter of not leaving the financing system for a single refusal criterion.
Identity theft
Identity theft affects both individuals and professionals. According to our expert, “ manager identity theft fraud alone represents 10% of fraudulent files in automobile financing . ”The risk is especially high for the person who is the victim of the theft who finds themselves with the deadlines for a loan that they did not take out.
The leasing scam
Finally, the leasing scam , which only concerns businesses, is the favorite technique of scammers. “ This is 90% of cases of auto financing fraud ,” confirms Maxence Pruvost. A well-established scenario in which false companies are created, using in most cases a paid straw man to provide identity documents and serve as a nominee. “ These are real networks of scammers with very deep resources. The companies last for months, even years, with all the necessary honesty to deceive the victims: false balance sheets, vehicle orders without payment incident (at least initially), regular information transmitted to the registry, and even real/fake websites. ”
Unfortunately, behind it, there are only empty shells which blur the lines. They remain dormant until the day they decide to act and disappear with one or more cars that they will never pay for. The damages can amount, in certain cases, to several hundred thousand euros.
Meelo at the service of automobile financing organizations to fight against fraud
Meelo uses AI , Open Data and Open Banking , as well as other solutions among the most efficient on the market ( Finovox , for example, and its false document detection software), to enable financing organizations automobile industry to focus only on files that merit enhanced analysis.
By cross-referencing data, such as contact data, the domain name of a website, legal information about a company (balance sheets, change of management, reactivation, etc.), Meelo verifies the identity of the requester, the consistency and the validity of the documents transmitted, as well as its solvency. Meelo assigns a confidence score, accompanied by a detailed report which pinpoints possible points of vigilance.
The objective is twofold, specifies Maxence Pruvost: “ to help automobile financing organizations protect themselves against fraud and to reduce the time taken to make granting decisions . ”
Meelo detects risk profiles in seconds
According to Maxence Pruvost, “ The Meelo solution presents two major added values . ”
The first is to create an automated and instantaneous alert on risk files. This allows analysts to focus only on those that deserve reinforced control and to validate more quickly those that do not pose obvious problems.
Meelo is a reliable and cutting-edge decision aid
The second added value is the precision and time savings that Meelo brings to the control. Meelo provides the tools that allow additional checks to be carried out: existence and ownership of the bank account, for example or authenticity and non-alteration of the documents transmitted.
And our expert explains this very well: “In the 5 or 15% of files on alert, we provide the keys that allow us to refine the checks . All elements are screened through a single channel. ” Meelo allows you to detect, dig, investigate and even, in certain cases, “ become an advocate for a case ”.
Fraudsters have the largest R&D department in the world
Meelo is continually on the lookout for new fraud techniques to develop its solution.
Maxence Pruvost confirms: “ Fraudsters adapt quickly. Are new controls being implemented by our customers? Scammers always find a way to get around them pretty quickly. This is why we are constantly improving our models. Responsiveness and adaptability are at the heart of Meelo's challenges to guarantee our users the best solution on the market . ”
Several customers already trust Meelo. Among them, Capitole Finance Tofinso and Roulenloc.
“ The solution was co-built with our customers to meet their expectations as closely as possible . Meelo is the only offer on the market capable of carrying out automated checks on all elements of the file at the same time .”
If you would like to know more about our solution, contact us !
