According to police experts, improvements in luxury car security have led criminals to use deception rather than theft to make a killing. Typically, the conmen can net pounds 15,000 in a couple of days selling a second- hand BMW they do not own.
"It is a massive problem. Instead of stealing prestige cars, thieves are getting them `legitimately' on hire purchase finance," said Inspector Mike Barron of the Merseyside Police stolen vehicles squad.
Revelations of the new scam, involving hundreds of thousands of cars, follow last week's announcement by Tony Blair of a campaign to cut the pounds 3bn cost of car crime by 30 per cent in five years.
Upmarket or high performance cars are being bought on hire purchase with cherished or personalised number plates, often from Northern Ireland. "Northern Ireland plates are used to disguise the origin of the car long enough to sell them on and walk away with large sums of money," Inspector Barron said. "Car fraud is a growth industry with links to other organised criminal gangs. It can be used as a means of financing drugs dealing."
Peter McGoohan, chief field investigator for the finance house Chartered Trust, said the use of cherished plates was a growing problem. "We are seeing fraudsters using a range of deceptions to obtain cars."
Not only prestige cars are sold to an unsuspecting public. Fraudsters also use deception to obtain ordinary family saloons and sell them on, too.
According to Equifax, which carries out checks on cars for potential buyers, there are five million cars subject to HP and leasing agreements. "One in eight used cars checked by the public on our database was recorded as subject to outstanding finance," said Paul Bridgman, UK marketing director of Equifax. Any such car can be sold legally only with the permission of the company that provided the finance.
Honest buyers of second-hand cars can have them repossessed by finance com- panies through the courts. According to Equifax, about 350,000 vehicles sold last year had changed plates, hinting at a questionable history.
Typically, the fraudster approaches a car dealer and offers to buy a prestige marque car, say a BMW 7 series coupe, on sale for pounds 20,000. He asks for the maximum amount of hire purchase from the dealer's finance company. To obtain the HP, the criminal gives the dealer copies of identification such as driving licences and utility bills. Usually, the documents are forged. "Criminals are using the latest computer scanners and printer technology to produce very convincing forgeries," Insp Barron said.
Fraudsters like to forge documents based on an older person who has been resident at one address for a long period. So Mr A Smith, aged 64, who has lived on Merseyside for 10 years suddenly becomes, in the forged documents, a 34-year-old who moved from Merseyside to Cambridge three months ago. The new address is often an empty house, to which the fraud gang has access.
As the elderly person will have no history of defaulting on credit, the HP is approved and fraudsters pay the minimum deposit and "buy" the car. On a second-hand BMW 7 series, this might be a pounds 2,000 deposit with the pounds 18,000 balance on HP. The fraudster drives away with the BMW. No repayments are ever made.
The fraudster now needs to sell the car on. The public are getting wise to fraud so they may use a company that conducts specialist checks. Companies such as HPI run the car's registration number into a database to check whether the car has been stolen, is an insurance write-off or has any HP payments still due.
To avoid these checks, the organised gangs will re-register their newly acquired BMW in Northern Ireland, where vehicle registration is not on the same system as the British licensing computer in Swansea. If the potential buyer checks the new number plate, usually a three-letter and four number registration starting with letters such as SIB, it will show no sign of a current HP agreement.
The fraudster then advertises a "bargain" BMW for sale, a bit cheaper than the going rate for the model. On the phone the fraudster will tell the buyer that the car has an Ulster plate to make it "special". If the BMW is sold for pounds 17,000 the fraudster makes a profit of pounds 15,000. An organised gang will use a set of forged documents and a convenient address to obtain a batch of cars. They may make a pounds 250,000 at a time.
Two years ago the Merseyside Police realised organised gangs were preying on dealers to obtain costly second-hand cars. These were then sold on to an unsuspecting public. The most effective racket involves the use of cherished or personalised number plates.
In response, police set up a radical experiment, "Operation Pimpernel", paid for by Finance and Leasing Association (which represents Britain's car finance companies). They pay pounds 105,000 a year for Insp Barron and two other detectives at no cost to local taxpayers.
The team has notched up spectacular results, recovering 84 cars worth more than pounds 750,000 including a Bentley 8, BMW Alpina, Porsche 911, Saab 900 convertible and many four-wheel-drives and other prestige cars.
Sixty-four people have been arrested and several are in jail for theft and deception.
t About 20 people are killed and damage costing pounds 77 million is caused every year by malicious car fires, a report said yesterday. The past 10 years have seen a 250 per cent increase in the number of car fires started deliberately, according to research by the Arson Prevention Bureau.
One in every 12 stolen vehicles was set on fire and burnt out, compared with a rate of one in 33 in 1986.Reuse content