Criminal gangs are using the cost of living crisis to rip off unsuspecting motorists looking for cheap leasing deals.
Car lease specialists have warned that scammers are using social media platforms such as Instagram to target vulnerable motorists with too-good-to-be-true finance deals which ultimately leave victims out of pocket.
Fraudsters offer brand new cars with lease deals and payment plans far below standard market rates and particularly target drivers with little or poor credit history by offering deals without any credit checks. They trick drivers into providing bank details or making deposit payments for the non-existent vehicles, leaving victims worse off and without a car.
Similar frauds have been used to target drivers looking for cheap car insurance as the cost of running a car has soared over recent years. These schemes see fake brokers or insurers take payment for fraudulent policies and target motorists who traditionally face higher premiums, such as newly quailified drivers.
Keith Hawes, director of Nationwide Vehicle Contracts, commented: “When it comes to car leasing, most major brokers and automobile dealers are trustworthy, but like any type of business, it’s easy for customers to fall for genuine-looking scams.
“If you’re suspicious about a business, then it’s always best to err on the side of caution. Scams are becoming increasingly sophisticated, so if something sounds too good to be true, it probably is, particularly if rates are hugely reduced compared to the rest of the market.”
To help drivers avoid such scams, Keith’s team identified a suspected fraudulent operation online and has used it to highlight the warning signs, as well as what you can do to protect yourself.
How to spot an online leasing scam
Key giveaways include:
- Too good to be true offer - any legitimate lender or broker will run credit check on potential customers, so the offer of leasing without the need for a credit check is a red flag
- Limited contact details - the company doesn’t have a functioning websiteand the only contact details are a Whatsapp number
- No search results - when searching for the business name online, there were no reviews as claimed on the account and the only search record was the Instagram account
- The images of cars posted on the account were all taken from the internet and had appeared on multiple other sites in the past. Experts were able to check this by reverse image searching on Google
- There was no record of the business name on the FCA and Companies House websites
How to avoid being a victim
One of the most obvious giveaways of a scam lease firm is a lack of official records. Reputable car leasing companies who deal with regulated customers must register with certain organisations, including the Financial Conduct Authority. Any legitimate firm should appear on the Financial Services Register, which holds details of every financial company registered and regulated by the FCA. You should be able to see their credentials by entering their name or postcode into the website. If a company offers financial services or associated products but not registered with the FCA, you should avoid using them.
You can also confirm if a company is registered with the British Government by searching for a company's details on the Companies House website.
Whilst it is not a legal requirement to join a trade body site, you can often use sites like the British Vehicle Rental and Leasing Association (BVRLA) or the Finance and Leasing Association (FLA) to help verify a car leasing company.
If you’re worried that contact from a company isn’t genuine, it’s worth running additional checks to avoid cold callers.
Treat all unexpected calls, emails and text messages with caution. Don’t assume they’re genuine, even if the person seems to know some basic information about you. Always double-check the website URL and contact details of a firm to make sure they’re not a “clone firm” pretending to be a real firm and check for the SSL green padlock in your browser. Finally, verify the contact details on the FCA register to ensure you call the business's genuine phone number.
Finally, if you think you’ve been approached by an unauthorised or a clone firm (a firm you suspect isn’t legitimate) contact the FCA Consumer Helpline on 0800 111 6768 and report it to Action Fraud online or by calling 0300 123 2040.
Keith adds: “Ultimately, you should feel 100% comfortable before entering into an agreement with a leasing provider. If something doesn’t feel right, trust your instinct and run additional checks. If you use an unauthorised firm, you won’t have access to the Financial Ombudsman Service or Financial Services Compensation Scheme (FSCS), so you’re unlikely to get your money back if things go wrong.”