ID checks when selling on finance

legal updates

It is important to have a robust procedure so that potential customers are vetted properly.

Read our disclaimer keyboard_arrow_down

This website content is intended as a general guide to law as it applies to the motor trade. Lawgistics has taken every effort to ensure that the contents are as accurate and up to date as at the date of first publication.

The laws and opinions expressed within this website may be varied as the law develops. As such we cannot accept liability for or the consequence of, any change of law, or official guidelines since publication or any misuse of the information provided.

The opinions in this website are based upon the experience of the authors and it must be recognised that only the courts and recognised tribunals can interpret the law with authority.

Examples given within the website are based on the experience of the authors and centre upon issues that commonly give rise to disputes. Each situation in practice will be different and may comprise several points commented upon.

If you have any doubt about the correct legal position you should seek further legal advice from Lawgistics or a suitably qualified solicitor. We cannot accept liability for your failure to take professional advice where it should reasonably be sought by a prudent person.

All characters are fictitious and should not be taken as referring to any person living or dead.

Use of this website shall be considered acceptance of the terms of the disclaimer presented above.

We have had a spate of false identity claims recently where the customer is not who they confirm to be.  For a minimal deposit, they obtain a vehicle on finance and then disappear with the vehicle. Thus leaving the finance company pursuing the dealer, under the indemnity clause in the signed terms and conditions between the finance company and the dealer, for the shortfall.

To stand any chance of being able to repudiate the claim from the finance company, it is important to have in place a robust procedure so that potential customers are vetted properly and due diligence shown.  Indeed, with the right procedures implemented, such a fraud may not even occur in the first place.

It is worth stating that finance companies lend vast amounts of money every day and they almost certainly have a procedure in place which should pick up such discrepancies, but it is down to the dealer handling the transaction to ensure the customer meets their side of the agreement.

So, here is a list of steps to take:

  1. View the original driving licence.  Check for anything that looks wrong.
  2. Check the licence using a UV light. These are just a few pounds on eBay.  There should be holograms on the front and back of the licence.
  3. Compare the signature on the invoice or deposit form with the signature on the licence.
  4. Compare the photo on the licence with the person sitting in front of you.  If possible, take a photo of both alongside each other.
  5. Take a copy of the licence and certify it as being a true likeness.
  6. Ask for a utility bill or council tax letter showing the name and address. Does this tally with the licence?  This can be difficult as life is more and more paperless, but they could log into their online account for fuel or banking which will show the address associated with them.
  7. Go to https://www.gov.uk/view-driving-licence where you can check a driving licence.  The customer can login and show you the details pertaining to their driving licence or they can provide a code so that you can check the licence yourself.  If a licence is a fake, it should not show up on the system.
  8. Ensure that you share any concerns you have with the finance company. They can guide you and make their own checks to ensure the process is as safe as possible.

It is important that copies of identification documentation are retained so that they can be retrieved if anything untoward occurs in the future.

It may appear onerous but most traders do the above already, and set against the cost of a £25,000 car being taken by a fraudster, it is time well spent.

InvolutionSTAFF UNIFORM | PROMOTIONAL WEAR | MERCHANDISE | BUSINESS GIFTS

Leading experts in print, promotional clothing, staff uniforms, branded merchandise and PPE. Involution is your brand partner for promotional marketing and workwear, a one-stop-shop for your branded marketing needs for any business size and industry.

Darren FletcherLegal AdvisorRead More by this author

Related Legal Updates

Work out if the correspondence received is credible…

Some of our members had received an identical email from a legal solutions firm about the possibility of losing their Financial Conduct Authority (FCA) licence.

Raising standards in all areas

The FCA is concerned that current financial services do not always work well for consumers and, in some instances, harm has been caused.

Mis-selling finance claims – Ignore at your peril!

Data subject access requests and various letters quoting CONC and the Consumer Credit Act are being received requesting lots of documentation to be provided.

Distance Selling Cancellation and Rejection – A Basic Legal Lesson for Finance Companies

The finance company who buy the car, are not consumers. The regulations do not apply to buyers, who purchase “in the course of trade or business.

FCA adds to “no win, no fee” compensation culture

It was found in a FCA report that car finance consumers may have been overcharged and deceived when arranging their car finance deals.

Goodbye 2021, hello 2022!

Despite an excess of 100 different commission claims hitting the Lawgistics’ desks, not one single dealer has had to part with their money.

What’s your representative APR?

If your motor finance provider suggests using 9.9% APR as a representative APR, you need to ensure that 51% of your finance deals are at 9.9%

Get in touch

Complete the form to get in touch or via our details below:

Phone
01480 455500
Address

Vinpenta House
High Causeway
Whittlesey
Peterborough
PE7 1AE

By submitting this quote you agree to our Terms & Conditions and Privacy & Cookies Policy.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.