THE BURNING QUESTIONS
HOW TO IDENTIFY AND HANDLE FRAUDULENT BANK STATEMENTS

MARSH FINANCE LTD

Historically, the automotive finance sector was anchored in face-to-face transactions and physical verifications. However, as digital transitions became more prevalent, the door for cyber fraud and manipulation inadvertently opened wider. The evolution of digital tools has made falsification more sophisticated, with the latest battle surrounding fraudulent bank statement submissions during car finance applications.

RISING FRAUD CASES ON CAR FINANCE APPLICATIONS

Over the last few years, Marsh Finance has noted a worrying upswing in fraudulent activities, specifically concerning bank statements in car finance applications. The integrity of financial documentation has always been paramount, but with fraudulent cases on the rise, the industry must be more vigilant than ever.

IS THE RISING COST OF LIVING TO BLAME FOR THIS RISE IN FRAUDULENT ACTIVITY?

Several factors might be driving this surge in fraudulent activity. A significant one is the rising cost of living. As living expenses outpace wage growth, some individuals feel pressured to misrepresent their financial position to secure vehicle finance. While this is no excuse for fraud, understanding the underlying motives can help formulate strategies to address the root cause.

COMMON FRAUD TRENDS: DOCTORED BANK STATEMENTS

Many of these fraudulent cases involve doctored bank statements. Whether through sophisticated digital manipulations or rudimentary paper alterations, applicants are presenting false records to enhance their financial standing. Such manipulations may range from inflating balances, removing evidence of financial hardship, or even entirely fabricated statements.

SPOTTING A FRAUDULENT BANK STATEMENT

• Inconsistent formatting: Mismatched fonts, varying font sizes, or irregular spacing.
• Rounded figures: Real bank statements often show exact amounts, not rounded numbers.
• Missing transactions: Suspicious gaps in transaction history.
• Logos and branding: An outdated or pixelated bank logo may hint at tampering.

Emerging technologies, such as AI-driven document verification systems, can play a pivotal role in detecting discrepancies in bank statements. By leveraging pattern recognition, anomaly detection, and machine learning, businesses can quickly identify and flag suspicious documents for review.

REPORTING CAR FINANCE APPLICATION FRAUD TO CIFAS

CIFAS (Credit Industry Fraud Avoidance System) is a not-for-profit organisation that aims to reduce financial crime. If you suspect fraudulent activity:

• gather all evidence related to the suspected fraud
• report the matter directly to CIFAS through their official channels
• notify the relevant law enforcement agencies.

Motor finance CCTA members play a pivotal role in creating a safer automotive finance ecosystem by reporting these incidents.

OPEN BANKING: THE FUTURE OF SECURE ASSESSMENTS

Open Banking offers a more transparent, direct, and safer alternative to reviewing bank statements. By allowing regulated businesses to access financial data directly from banks (with the customer’s consent), the chances of encountering fraudulent statements drop dramatically. Get a clearer view of an applicant’s finances whilst streamlining the application process.