In a not-so-uncommon case, TV’s Wheeler Dealer Mike Brewer fell victim to a debit card scam at his dealership. We see this occur reasonably often, but few dealers are prepared to advertise they have been scammed. This reluctance, through either embarrassment or fear of unsupportive ridicule, stops the message from getting out, and as a consequence, helps to enable the scammers.
This lack of reporting is not exclusive to the motor trade. The Crime Survey of England and Wales estimates only 13% of cases are being reported to Action Fraud or the police. Given that the National Crime Agency reports that fraud makes up for over 40% of all crime in England and Wales, it’s a huge issue.
Our industry is fortunate to have had someone be publicly open about this type of fraud. We have received several calls on our legal helpline from those who want to avoid a similar fate.
Like many finance companies, when a consumer complains about a vehicle, banks are notoriously reluctant to back the dealer in a chargeback fraud issue.
In this case, the true cardholder had told Barclays they did not authorise the two transactions on their card. We do not know the level of investigation Barclays undertook, but Mike Brewer found himself losing the car to a fraudster and the payment to Barclays, as it was his money refunded to their customer.
Barclays says that “card not present” transactions are inherently risky. Yet in this case, they allowed two transactions, over £5000 each, to go through without question. If they, and other banks, know these sorts of transactions are inherently risky, why are there not effective systems in place to counter the risk?
Of course, one answer is that it’s simply easier for the banks to leave an innocent dealer out of pocket. The banks are happy, their customers are happy, and the fraudster is happy, never mind how the innocent dealer is.
Some of our dealers avoid card transactions altogether and rely on bank transfers. Bank transfers avoid this sort of scenario, as well as the chargebacks and Section 75 refunds where the customer complains about the vehicle sold to them.
In the Mike Brewer case, the buyer used a fake ID. We always suggest checking the validity of a driving licence by visiting:
https://www.viewdrivingrecord.service.gov.uk/lang/en/driving-record/validate
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Car deliveries must be made to a valid address. We have seen a previous fraud case where the car was delivered to the address on the licence but in hindsight, the delivery driver realised that they didn’t actually see the “buyer” come out of the house; they were already waiting outside. It wasn’t their house and it was a fraud. Luckily, in that case, the dealer “stole” their car back after tracking it down.
Reporting the fraud to the police and getting a stolen marker on a vehicle that has been purchased fraudulently is always recommended. It won’t necessarily help if new registration plates are added and the car becomes a cloned vehicle, but that is a whole other story.
In Mike’s case, the stolen marker came good and the vehicle was recovered and this shows why reporting the issue to the police is important. However, the banks should consider further and improved measures to safeguard against all fraudulent activity.
