Fraud in the equipment finance business continues to persist and the industry could cope with the rising number of bad actors by fostering a “collaborative” approach.
“We’d be naive to think fraud is going to disappear, there’s always going to be fraud out there,” said James Rudolf, chief commercial officer at U.K.-based Acquis Insurance Management, at the recent National Equipment Finance Association’s spring conference in Huntington Beach, Calif.
He added that Acquis is “not necessarily seeing an increase in it, though you could say when economic times get a little bit tougher, there is a propensity for fraud to increase, so we need to be wary.”
Rudolf is based in Cardiff, while Acquis has its global headquarters in Newport, Wales. The company expanded into the U.S. in November 2023 The deal saw Brian Madison take the reins of Acquis’ new U.S. business, which serves clients including BNP Paribas Leasing Solutions, CNH Industrial, Deutsche Leasing, Investec Asset Management and Societe Generale Equipment Finance.
Collaboration is key
“What we’re seeing in Europe, and I think it’s the same out here, is one way to battle fraud is through collaboration,” Rudolf told Equipment Finance News. “Because you might have people that are competing for business, but then definitely not competing for the fraud. So therefore collaborative approaches to preventing fraud in our industry [is what] we’re seeing a lot of.”
In January, software management firm Inscribe issued a report on document fraud that found that 80% of the banks, fintechs and lenders surveyed reported an increase in fraud attempts over the past year. Fifteen percent of those surveyed said first-party fraud is increasing, while 13% said third-party fraud was up, and nearly half – 48% – said all types of fraud are on the rise.
Business impersonation fraud is also on the rise. The Equipment Leasing and Finance Association’s 2024 report, released in February, noted a 10% year-over-year uptick in business impersonation fraud.
Rudolf noted that in the U.K., “we’ve seen some quite large fraud,” which has led to companies collaborating by sharing data and creating “centralized databases” that allow them to track fraudsters, an approach he said could work in the U.S. as well.
“We see an industry problem that the industry wants to solve together, rather than something businesses want to solve independently,” Rudolf said.
Register for the 2024 Equipment Finance Connect, which focuses on best practices in equipment finance, on May 5-7 in Nashville, Tenn. Learn about the event and free dealer registration at EquipmentFinanceConnect.com.
