Asset Finance Sponsored by Asset Finance People UK asset finance industry needs to get serious about fraud prevention Published: 19th January 2022 Share It seems like every five years or so that the asset finance community in the UK revisits often-discussed plans to establish an asset register to protect themselves against fraud. Now is just such a time, with an estimated 55 industry lenders facing the prospect of losing cumulatively £282 million of outstandings which together they provided to a single organisation, secured against equipment which may well never have existed. Will the latest alleged fraud be enough to encourage lenders to follow through on developing tools and systems that help to prevent such frauds? The answer, according to Nick Leader, CEO of Acquis Insurance, is not to focus on establishing an asset register which brings with it a number of practical problems (it’s an enormous task to establish a robust, searchable database of assets with secure and unalterable unique identifiers) and to focus instead on a register of borrowers which can be easily maintained by an agreed and trusted representative of the lenders themselves. “By focussing on borrowers, lenders can identify likely large-scale frauds where the amount being borrowed across a large number of lenders exceeds the balance sheet assets of the borrower” he notes. This solution, as opposed to an asset register, has the advantage that it is practical and achievable and could potentially be quickly established if sufficient buy-in amongst UK lenders can be achieved. Leader floated his idea with just such a group of industry professionals last Friday in an industry meeting which included many of the leading asset finance providers, Simon Goldie from the FLA, plus Asset Finance Connect’s content leaders John Rees and Stephen Bassett. Although there was consensus on the need for a solution, and even what that solution would ultimately look like, opinion was somewhat split as to who is best placed to provide it. Some lenders who already share their transactions with credit reference agencies and who thought such agencies could develop a solution and others preferred the idea of a home-grown solution provided by an independent business well connected within the asset finance industry such as Acquis. The outcome of the meeting was the establishment of a small working group who will meet once a week for the next few weeks to fine tune the design of a solution that can be shared with the wider leasing community. Leader’s solution stands every chance if it can establish itself before the sting of the latest alleged fraud starts to fade. BUT Leader stresses “the value of any database ultimately depends on the quality of the data and this project will require industry wide commitment. We are faced with a unique opportunity to come together as an industry to create a purpose built solution to a pressing fraud issue that affects us all. Together, we are very well placed to deliver a solution quickly and efficiently that will represent a big step forward in the early identification of potential fraud.” For more information about Nick Leader’s working group, contact johnrees@assetfinanceinternational.com To participate in a broader industry discussion of fraud in asset finance (including an update on Nick Leader’s proposal) at our annual asset finance unconference, contact stephenbassett@assetfinanceinternational.com Edward Peck CEO - Asset Finance Connect Sign up to our newsletter Featured Stories AppointmentsLloyds expands its asset finance team across the UK Corporate Member Thought LeadersClose Brothers Broker Solutions: A vision for the future AppointmentsCallum Bull appointed as Director at PMD Asset Finance