A “motor trade scam” is a fraud aimed at car-selling and car-finance businesses. Scammers take advantage of how fast and paperwork-heavy car deals can be.
A “ghost car” is basically a made-up car in the paperwork. It helps scammers trick finance companies and dealers into thinking a real vehicle deal is happening.
This is when someone submits a fake or improper car finance application to get money approved. The proposal doesn’t match what’s actually true about the deal.
Concept
HMRC account
HMRC is the UK tax office. Scammers try to log into your HMRC online account so they can steal your details and redirect tax refunds.
“Dealer fraud” means scams that involve car dealers. Sometimes dealers are in on it, and sometimes they’re tricked into participating without realizing it.
This is the part of the car world that helps people pay for cars over time. It involves lenders, brokers, and dealers, and scammers can abuse the paperwork and steps involved.
It’s a scam where someone sets up car finance paperwork for cars that the customers never really receive. The “ghost” part means the cars aren’t actually delivered, but the finance process still gets started.
They’re talking about WhatsApp as a messaging app people use to share information quickly in a private group. Here, it’s how people first heard something was going wrong.
A car finance broker helps arrange the money for buying a car. They connect the people who want the car with the finance side, and they depend on dealers to handle the real vehicle delivery.
DSG Finance is a company that helps arrange car finance deals. In this story, they’re the broker that ends up dealing with the consequences of the scam.
“Ghost vehicles” are the cars that the paperwork says exist, but the customers never actually receive. The scam creates financial problems because the finance is arranged without real delivery.
This means whether the car already has an existing finance agreement attached to it. If there’s no finance marker, the paperwork looks clean, which makes it easier for scammers to push the deal through.
A “car data check” is an automated verification process that confirms vehicle identity details (like registration) and flags items such as finance markers or history. The scam works because the fraudsters choose vehicles that pass these checks, so the broker believes the car is legitimate.
Instead of picking cars randomly, scammers prepare a list of cars that are easiest to get through paperwork checks. That makes the fraud more reliable for them.
Concept
complicit customers
“Complicit customers” refers to borrowers who knowingly (or at least cooperatively) participate in the fraud by applying for finance under false or misleading circumstances. The speaker suggests some customers may have been involved, not just the fraudsters and brokers.
An intermediary is someone who sits between two people. Here, the fraudster is the middleman, so the dealer doesn’t actually talk to the real customer.
“Cheap finance” refers to financing offers that look unusually low-cost compared with normal market rates. Scammers use these offers to attract victims and make the deal seem like a bargain.
“Prime customers” are borrowers considered low risk by lenders, typically based on credit history and affordability. The transcript suggests fraudsters steer deals toward these lower-scrutiny cases to reduce the chance of extra verification.
Additional levels of verification are extra checks a dealer or lender performs when something doesn’t look straightforward. Here, the fraudster-controlled communications make it harder to validate the buyer directly, so the dealer may request more proof.
ID verification checks are steps that confirm you are who you say you are. In this scam, the documents are real, so the checks can pass even though the dealer never actually speaks to the buyer.
When a dealership arranges a car loan, it can earn a commission for setting it up. In the scam described, the dealer keeps that commission while the scammers take the money instead of delivering the car.
A gearbox is the transmission system that changes gear ratios to match speed and engine load. In scams like this, “gearbox issues” is used as a believable excuse to delay delivery while the finance payments continue.
Concept
car finance market
The “car finance market” refers to the ecosystem of lenders, dealerships, and brokers that arrange loans or other financing for vehicle purchases. The hosts use it to contextualize how widespread the losses are across the industry.
An indemnity clause is a legal promise that says, “If we cause losses, we’ll pay for them.” Here, the dealers were supposed to cover the finance company’s losses, but they didn’t have the money.
A finance deal is when you don’t pay cash for the car—you borrow the money through a lender/finance company and repay it later. The fraud here targets that lending process.
A broker is the go-between who helps set up the car finance with the lender. In this story, the broker’s role is linked to who has to cover the money when things go wrong.
This is the organization mentioned as starting the investigation. They gather reports from car finance brokers and dealers to help identify patterns in vehicle-related crime.
An “indemnity” is basically a promise to cover losses if something goes wrong. Here, the host doubts the promised compensation will actually materialize because the people who should pay don’t have the money.
This is when scammers pretend to be real customers to get finance or purchases approved. The host says the fraud pattern has been moving toward impersonating consumers.
“Liquid” just means cash-like—money that can be turned into cash quickly. The host is implying some dealers didn’t have much readily available money to cover losses.
Companies House is a public UK database of company information. The host is saying criminals may use it to figure out which businesses to target.
Concept
finance system
A “finance system” is the process used to set up car payments through a lender. In scams, people try to get the money to move through that setup even if the car never shows up.
“Stock” just means the cars the dealer actually has on hand. If they say they don’t have any cars but still sell through finance, that’s a warning sign.
This means the dealer/broker is supposed to be officially regulated by the UK financial watchdog. They’re expected to do proper checks before arranging credit for a car deal.
They’re talking about who is legally responsible when a car deal goes wrong. In this case, the speaker says the dealer is responsible if they didn’t do proper checks.
They’re talking about fraud that happens during car financing. It targets the paperwork and steps dealers and lenders use to approve loans and hand over cars.
This is when scammers pretend to be you (or another real customer) to get a car deal approved. The dealer can get tricked into doing the paperwork for the fake identity.
Concept
automation and online delivery expectations
They’re saying that because people expect everything instantly, scams can slip through if dealers don’t slow down to verify identities. It’s a warning about moving too fast in the buying/financing process.
A biometric check is a way to prove it’s really you—often by matching a face or using your identity data. The scammers trick people into doing the check so the fraud can proceed.
Identity verification is what a lender does to make sure the person applying is real and matches the documents. Scammers impersonate trusted institutions to get the information they need.
This is a type of scam where criminals message people on social media to get them involved in something fake. They may pay the victim a little at first, then the victim later gets blamed or tries to reverse it—while the scammers keep the money.
HPI is a UK database that checks a car’s history. It can show things like whether there’s outstanding finance, and scammers try to use cars that don’t show up with those red flags.
Term
market check
A “market check” is a quick verification against information sources that track cars. Scammers try to use cars that look clean in those checks too.
A “finance payout” is the payment the lender releases when a car finance deal is approved. The scam relies on getting that money released using fake/invalid car details.
Application fraud means lying on a finance application or using someone else’s details to get approved. The scammer’s aim is to get the loan without being the real person behind the identity.
Biometrics are identity checks that use your unique physical traits, like your face or fingerprint. The point here is that the scam can get past those checks.
Concept
pre-disbursement vs post-disbursement dispute (reimbursements after no delivery)
Here the lender reverses payments after being told the car was never delivered. Then the lender tries to recover the money from the broker and dealer, but the scam can leave the lender stuck.
They’re describing fake-looking car adverts online—possibly made with AI—so the listing seems real even when the car isn’t. Scammers use these websites to convince dealers and customers that inventory exists. It’s part of how the fraud gets past normal checks.
An “FCA license” refers to authorization from the UK’s Financial Conduct Authority (FCA) to carry out regulated financial activities. In the segment, a caller claims they can arrange finance for a vehicle even though they don’t have the required FCA authorization. That’s a key red flag because legitimate finance arrangements require proper regulatory permissions.
LIVE
Hello and welcome to the Cardila podcast. In this special episode, I'll be tackling
something a little different. A motor trade scam that has seen businesses taken for millions
of pounds. It's a complex case involving multiple criminal layers that has seen dealers,
brokers and finance companies, according to some conservative estimates, lose as much
as £10 million. It's a scam that involves ghost cars, rogue finance proposals, organised
crime gangs and dealers who may have thought they'd found an easy way to make a quick
buck, only to end up with their businesses destroyed. Recently, it might feel like scammers
have upped their game when it comes to targeting the car industry. High turnover, fast-paced
transactions and a desire to do a deal mean it's right for con men to exploit. So far
this year, I've looked into quite a few scams, all targeting the motor trade in slightly
different ways. The first was a con that saw criminals prey on consumers. The scammers
pretended to be dealers in an attempt to get car buyers to hand over thousands of pounds.
I caught these scammers in the act when I called one of their fake dealerships pretending
to want a car and I recorded their elaborate scheme for a YouTube video. You can watch
that now by searching the Cardiola Magazine channel for our Inside a Fake Cardiola Scam
video. Not long after posting that one, I received a fake letter from more con artists
pretending to be from HMRC. A letter encouraged me to log onto a fake website that had been
made to look and feel like it was the government's. There, they tried to steal my details, take
over my HMRC account and divert my tax refunds to them. It seems the motor trade is constantly
in the eye of scammers. But in this podcast, I'll be looking into a sophisticated scam,
the likes of which I haven't heard of before. I'll be chatting to finance brokers who saw
the scam unfold. These would appear to be exceptionally professional crime gangs. They're
not messing about. This isn't a kid in a box room on a laptop. These are serious people.
Here, how dealers have got caught up in the saga. It's basically what we class as dealer fraud.
Dealers being complicit, dealers unknowingly being hit by this. And we'll see how this
case has snowballed into one of the biggest frauds the motor finance industry has ever
seen. This is the story of a ghost car fraud, a 10 million pound finance scam.
I was first made aware of this scam by the car finance broker community. A close knit
group of like minded businesses word got round in a private WhatsApp group that at the end
of last year, there was a huge fraud taking place. What started with what looked like
a dodgy dealer in the Southeast soon escalated into a fraud taking place on an industrial
scale. Rob Woolen is the chief operating officer of DSG Finance. They're one of the leading
car finance brokers in the UK. His firm has great relationships with their dealers, relationships
built on trust over many years. So when one of them went rogue, it was a surprise. What
they weren't expecting was what was about to unravel.
My name is Rob. I'm chief operating officer for DSG Finance. So we're one of the largest
car finance brokers in the country. We work with dealers right down from the household
names down to independent dealers and we also have a direct consumer offering.
Give me an idea of this scam in a nutshell. What's been happening?
Came to light last October that a dealership that we've been working with for around three
years had effectively, I guess the best phrase has gone rogue. So it started to become clear
that they had been proposing vehicles to us for finance, that they never had possession
of sending them to customers who never took delivery of them. And when it all came crashing
down, we ended up with a huge, huge bill for all these vehicles that were what have been
called ghost vehicles. But ultimately, the dealer involved would appear to have had, I guess,
a bad year for business. So they were vulnerable to somebody approaching them.
Somebody appears to approach them and said, look, can you handle a few more finance transactions?
Because I've got the cars, you've got finance, let's work together. We believe, but we don't know
for sure that that dealer wasn't deliberately complicit at the beginning. Suddenly there's
a magic, extra few deals, times are hard, everyone's trying to scrape a living together.
It's hard to make the money in the metal. And this opportunity arose. It's my personal belief
that they can't have not known forever. They must have realized at some point they'd never seen
these cars. People must have contacted them. But you know, these would appear to be exceptionally
professional crime gangs. They're not messing about. This isn't a kid in a box room on a laptop.
These are serious people. And they clearly managed to get, you know, a considerable amount of money
out of us, but we weren't the only broker here. You know, it's come to light that this is,
we're talking about millions of pounds with a fraud over the last six months.
It's probably not a million miles off 10 million not.
So you talk there of a huge multimillion pound fraud. Just explain to me a little bit then
the detail of how this works. We talked about a rogue dealer. You've talked about ghost cars.
I mean, how does this scam actually work?
Okay, so we're having to piece together a bit on this. There is a obviously a police
investigation. It's out of our hands now. We don't do that. That's signed a bit.
But what we think happens is these fraudsters will find a vehicle that has no finance on it.
Because then when we do our checks on the car data check, it will come through,
clear the vehicle exists, the registration exists, it is that vehicle. You know, we can check that
vehicle and find that it's absolutely saleable. There's no finance marker on it. There's no
history on it, which will prevent us from selling it. So they're clearly going out with a shopping
list of vehicles. They're not doing this by chance. Once they've got their list of vehicles,
they'll propose those vehicles to us. And they'll also find a genuine consumer with whom to propose
those details. Now, in honesty, I believe that there must have been some complicit customers in
this. I think that the very start, this probably went on for about three or four months. I think
at the very start of that, they must have known. I mean, who finances a vehicle? And three months
later, it hasn't arrived and they haven't done something pretty serious about it. But they get
a genuine person. They get them to, they apply for financing their name. From what we've pieced
together, that consumer doesn't appear to contact our dealer directly. They appear to go through
this intermediary, which is the fraudster. So they're contacting the fraudster. They seem to be
advertising through WhatsApp and Facebook, of course, all those, all those pages have disappeared
now. But they appear to be advertising cheap finance, get your car here. The consumer then
approaches the fraudster, gives them their driver license, a copy of their driver license,
gives them their name, address, bank account, date of birth, and they forward that proposal on to our
dealer. Now, with our dealers, they've been working with us for a few years. These were never new
dealers. They're on hard times. As we know, it's a difficult market out there. They see these offers
that are too good to be true. And they, I believe at the time, they think they are providing the
vehicle to a customer. So the fraudsters have got a genuine vehicle. It passes all our checks.
It's saleable. It's got no market to prevent it from being sold. I mean, they might just be sitting
in a Tesco car park, right? Just taking our wedges and doing the same checks we do to make sure they
can propose some vehicles. They then get a genuine customer, a real person. So they get their basic
details. And then what they're doing, the people in the middle, the fraudsters, they're controlling
all communications. So they'll control all communications from the customer. They'll control
all communications to the dealer. And of course, we've got communication channels directly with the
dealer. So they'll make the proposal in a customer's name. They'll generally be quite credit worthy
customers. So they'll be prime customers where there are fewer checks that are done. Often there's
there's a little bit less kind of deep dive on these cases. And they'll propose the business to us.
And very often with these cases, we will then ask for additional levels of verification.
But because the communications are being channeled through the fraudster and then back to the customer,
we'll get them. So all of our customers passed, you know, proper ID verification checks online,
because they were real, and they were the real person, and they were genuinely expecting to
purchase a vehicle. So these are genuine people that may or may not have been involved in that
crime. But the dealer who is proposing them to you has never actually seen or spoken to them.
This all is coming via the scammers. What happens next, Rob? Fast forward to the deal gets processed.
We send the funds to the dealer, which of course, those funds should be going to the
to the dealer for a real vehicle. They as far as we understand them are passing those funds onto
the fraud gang. They're keeping the finance commission that we pay. And that's their arrangement.
They think, great, you know, I get the finance commission, they get the money, the metal,
away we go. Because the car is being driven on by its genuine owner, who's taking out the Tesco's
car park, and it never arrives with the customer. They don't seem to run these scams for very long
in one place, because I guess it eventually comes out. So let's say there's about a three-month life
in this. We suspect that some of the initial customers may well have been complicit. But we
also know that the fraud gang seem to have given quite plausible stories. So they'll say, look,
sorry about your car. We were about to deliver it to you, but it's got gearbox issues. So we're just
getting that fixed. What we'll do, we'll pay your finance up until the car arrives. So don't worry,
nothing's happening to you. We'll pay your finance. Well, they're quite happy to pay their finance,
because they've got all the money from the whole value of the vehicle. So they'll pay the finance.
Customer, therefore, doesn't complain. And, you know, eventually it comes out of woodwork,
because it's been three months now, and that's when the complaint is rolling. And once the door
opens on these, James, the first complaint comes in, and within a week, the whole bunch is four.
Give me an idea, then, of the scale that some of these dealers have been taken for. Because,
I mean, it's quite hard to work out where the victim is. But I mean, firstly,
give me an idea of the scale. Okay, so in terms of scale, we've seen across the car finance market
somewhere probably a close approach of about £10 million over the last six months. That wasn't
all on us. We didn't get bitten by that, but we got bitten by a considerable amount of money,
which was, you know, approaching catastrophes this business. What sort of cars were they doing, Rob?
What sort of value are we talking here? These vehicles seem to be, well, interestingly,
actually, James, in the case we saw, they were around about the sort of £30,000 to £40,000
mark, occasionally dipping down into the 20s. But they were just dipping shy of the £40,000 mark,
by potentially, you know, in some cases, there might be further checks done or something like that.
But they are clever people. They are constantly evolving. We know that individual dealers,
we are talking, in each of these individual dealers cases, we're talking about marks in the
millions. And where are these dealers based and what has happened to them since? The one that we
had, the particular one that we got really badly burned with was down in the southeast. We've also
seen quite a lot of these cases up in the northwest of England. And what appears to happen is, and
this is where I think it's really important, that I do genuinely believe that these dealers went in
with what might seem to be, you know, I guess innocent intentions. Maybe they should have been
a bit more, asked a few more questions. But ultimately, their business is going to fall.
They're going to fail because whilst we've had to pay the bill on these frauds that we've suffered
from, we do have an indemnity clause with those dealers where they're liable to us. It's just
they obviously can't pay that money. They've paid that advance away. They don't have the money to
pay these out. And therefore, they're just going to end up folding. So what we've seen is all of
them have shut the sights down. They're no longer trading. They just disappeared off the face of the
earth. Because you guys are a broker. So you're a broker in that finance deal on behalf of a finance
company for the dealers. So you're a middleman, aren't you? So I take it you indemnify the finance
company. So you have to pay the finance company back the money? Absolutely. Absolutely. So we've
suffered that as a 100% loss. What's it cost your business from? The bill to us last year was just
a little over a million pounds. That's an incredible sum of money, isn't it? I mean,
a business of any size would find that very difficult to sustain. Well, yeah, James, it's
not a loss we could take again. It's a huge, huge amount of our trade. And so how many of
these deals do you think have gone through fraudulently? Can you put a number on how many deals
there were? There are hundreds. You've already got to do the math quite quickly, haven't you? If it's
30 deals at 30,000 pounds, we're getting very close to where we got hit. So it doesn't take
actually that many road deals to hit a company very, very hard. We are aware of at least one
smaller broker that ceased trading because they couldn't sustain and couldn't continue the losses.
We were lucky that we could continue trading, but that wasn't easy. It's not the sort of money
that you can find down the back of the sofa. And I think just our longevity and our scale
managed allowed us to sustain it, but it's stung. So those consumers, you said some of them you
think are complicit. I mean, what do you mean by that? I find it very hard to believe that somebody
buys a car, starts paying out finance on it, and three months later, they say they haven't
received the vehicle. We also, James, have one customer who we actually cited the vehicle on
their property because we've got field salespeople. So we've got a photograph of the vehicle on the
customer's property post sale, and they've made a complaint now saying they never received the
vehicle. Well, we know they did. So there is almost definitely a level of customer complexity. I
mean, that's with the police now, James. We're not investigators. We're not going to go down to that
level of kind of, you know, we've passed our information to the police and it's down to them to
do the investigation now. But I would be very surprised, you know, if you imagine if you bought
yourself a lovely new car that you're really looking for to get in June, you think by the end
of the summer, you might have mentioned it to somebody. In fact, if I had one message for
consumers out there, if you haven't received a vehicle that you're expecting to receive,
don't be, don't be brushed off by any excuses. If you contact your finance company,
your finance company is responsible for that vehicle being delivered to you,
and they will make efforts to ensure that's being done. So please don't just sit by and,
you know, don't accept excuses. If you've not had a car after months, there's something going on.
What have the police said? Who's investigated it?
It was originally investigated by the National Vehicle Crime Intelligence Service.
But what they do is they collate a file from all the brokers and all the dealers that have
kind of reported losses. And if it's big enough, and if there's not obvious case there, that's
then investigated by a police force. So this has been investigated by a metropolitan police.
We've actually heard very little from them since the file went over. I think, you know,
the police working in mysterious ways, I guess. We've not heard anything so far.
Do you think you'll see any of the money back?
Honestly, no. I don't think they will. I think, you know, the indemnities there,
the dealers got no money to pay us back. And, you know, the fraudsters will have taken that
money they were long gone. I don't think we're going to see if any.
Who do you think's behind it?
Well, all the conciliators, this is serious crime. These are highly sophisticated, highly
intelligent, highly resourced people who are able to commit fraud on a massive scale that
they're committing fraud. I don't know. I don't know who the individuals are that are involved.
But they are not isolated cases. I think the big change for what we were looking
at from last year is we've always been aware that, you know, you might get the odd person
using a fake driving license impersonating somebody. In fact, we've seen a big spike in that
in the last two months, switching from dealer fraud now to consumer impersonation fraud.
But the belief we have is that these are serious organized crime.
And those dealers that have been, well, I mean, possibly innocently caught out in this, I mean,
how do you think they were targeted in the first place? How do they get wrapped up in this?
I mean, this is a little bit of speculation, James. But what we do see a little bit of a trend.
These dealers seem to deal with it without a huge amount of liquid capital or liquid assets.
That information is all available on company's house. It wouldn't surprise me, you know, if that's
how people are being targeted, or even if they just find out what's in the market and target
people, or maybe they are just approaching all dealers and say, look, are you finding things
hard at the moment? We can help. We know that car dealers want their customers to get good cars.
I don't believe any of these people have gone out to deliberately do this. Car dealers want
to give people good motors. That's what they live for. They're passionate people who care about
the industry, care about the customers. I do think they should have asked more questions.
I think if it sounds too good to be true, that's fair. It probably is. If you're being told, look,
you don't have to do anything with this vehicle. No prep, no registration. All you do is just put
it through your finance system and you get the commission, we'll get the money, the metal. Sounds
great, doesn't it? It sounds like a dream come true. But it is too good to be true. There's
always a catch, isn't there, and a catch here is these cars don't exist. Rob, have you had
conversations with any of those dealers that got caught out? What do they say when you speak to
them? We have. We spoke to the one that caught us, the biggest hit that we had. It was interesting
what they said because we said, look, this is what's happened. These cars haven't been delivered.
You're going to have to sort this out for us. You owe us all this money. They said, well,
I don't have any money. We said, well, where's all your stock? The words they used, they said,
I don't have stock now. I'm a saucer. I do think he'd almost kidded himself. I don't think he's
innocent because I think there's a responsibility. All these dealers are FCA authorized credit
brokers. There's a responsibility as a credit broker to do things right and not to cut corners
and to ask questions and to check what's going on. They're not innocent because you don't have to,
just because you haven't done anything deliberately wrong doesn't mean you're innocent
if you haven't done what you're supposed to do. That's right. I genuinely think he'd got himself
kidded into this world where he saw himself as a kingpin saucer and thought he was doing
all this fantastic business and never asked himself, why am I making all this money for
absolutely no effort? Where's the liability lie in this? There could be some people who say
those dealers have been conned themselves. Those dealers unfortunately have conned you
and unfortunately you've passed that on to the finance company. Where's the liability?
Think for me, the liability is quite simple. If you're selling something and you're selling a
vehicle and our terms and conditions are clear, you have to hang up to the vehicle before you
sell it. We don't authorise our dealers to sell vehicles they don't own. The liabilities with
them, now I know you know and the whole market knows that there are people who will find a
vehicle for a customer cost of them. You've got great customers, you'll find them a vehicle
but you still do it right. You get the vehicle. Surely your reputation when you hand over a vehicle
stands on your preparation and the fact that you know that vehicle is in good form. For me,
the liability is with the dealer. Is this the biggest scam that you've seen
for the finance industry taken for? Absolutely. I'm sure that in big financing
corporate there's much more. I'm sure there are a hundred million panfros out there but
in this industry, this is unheard of. When we saw Broke last year and we weren't the only people
to be caught by this, it was unheard of and it's made huge changes. It's made a huge
change to the way we do business. One thing I'll share again with the car dealer community is
please be patient because we're having to check more. We're having to ask more questions and when
we do that we do it to protect ourselves but we're also doing it to protect you. Is it still going on,
Rob? Yes. There were recent cases in December and January. The recent spike we've seen is in
individual customer impersonation fraud. We've seen a massive spike in that just in the past few
weeks actually. The quality of those impersonation frauds would lead me to believe that these are
also serious criminals. We just have to all be vigilant and like I say, the biggest message
is in this market. In a world of automation when everybody wants everything, they want to
get their car from Amazon and have it on Prime and deliver the next day, we need to be careful
and we're doing it to protect everyone. Because what these dealers, because I don't believe that
any of these dealers entered into this with Malice, I don't, I think they were certainly
negligent. I think they certainly have pushed the boundaries of what anybody would say was
acceptable even at the beginning but ultimately their businesses have gone off. Those businesses
have disappeared and the fraudsters, I don't know enough about these gangs but I'll be very
surprised if the fraudsters are going to help them out. The fraudsters will have disappeared,
they'll move on to their next target and they will leave destruction in their wake.
No one wants to see businesses destroyed but that's exactly what has happened to the dealers
involved and if I'm honest, it's a surprise that that broker community has weathered this storm too.
As Rob explained, there must have been an element of some of those customers knowing
what they were getting involved in. Whilst investigating this story, I heard from other
finance sources about two ways customers may have been dragged into this scam. The first
could have been entirely innocent. They could have simply been victims of a fishing exercise
that stole their personal details that the hackers then used to apply for finance.
And when a biometric check was requested from the finance house to prove that customer's identity,
the scammers would call up pretending to be from their bank. Perhaps they said they'd
been locked out of their account and they needed to prove who they were to get back in.
The scammers would then send them the biometric check the car finance house needed. A scan of
their passport perhaps a selfie to match and thinking it's their bank, the innocent customer
would go ahead and do the check. Money is then taken from their account for the car finance
they know nothing about. So they call the finance company and it's at this point the scam unravels.
Both the consumer and the finance company have been the victims. The second way is when a consumer
knows they're involved in something untoward but they might be desperate for cash or vulnerable.
The scammers contact them via social media offering a quick cash payment for assisting.
They fill in their details, apply for finance and the scammers then pay in some money to their
account to help them make those first three car finance payments. After that they call the finance
company and ask them why they've been taking money out of their account. They claim to have
never received a car or know anything about the finance deal. The finance company pays them the
money back, they keep the cash and the fee they got from the scammers for setting it up. Meanwhile
the fraudsters keep the whole payout they got from the car. As I said it's a complicated and layered
scam that's taking place on an industrial scale. Dan Horner is the managing director of Octane
Finance, another broker caught up in the scam. He tells me what he knows about this sophisticated con.
Yeah so it's come to light over the last six to nine, twelve months I would say.
It's basically what we class as dealer fraud, dealers being complicit,
dealers unknowingly being hit by this. Ultimately it's stemming from what we're
understanding from intelligence, organised crime and they're even infiltrating dealers.
Hence why some dealers are complicit and some dealers aren't.
How much has it taken your business for if anything?
We were fortunate that nothing happened to us last year when the big bulk of it
sort of come to light. However we did get hit by one dealer for a good six figure sum.
It seems like this has come off the back of consumers maybe knowing about it,
maybe not knowing about it. What do you think? How do you think this scam actually works?
From my understanding and what we're led to believe is organised crime. It's not so much organised
crime but the huge majority is coming from organised crime or dealers just looking for
an easy way out. From my understanding they are getting ghost cars, what I mean by ghost cars,
cars that haven't got any markers against them on HPI or market check.
So there's no finance outstanding, almost like a clean car effectively.
Probably not even in the UK anymore, probably been exported.
So then what happens is the dealer will get an applicant, get their details, apply for finance
on said ghost car. Finance then gets paid out, broker pays the dealer, dealer's got funds for
a car that doesn't exist effectively. We're seeing that most cases are above 20 to 25,000 pound,
going up to some large figures, invariably 40, 50, 60,000 pound lens and
here just sort of going up into the sunset with the funds.
There'll be people listening to this wondering how the dealer has managed to prop these customers up
and how finance brokers and finance companies have not spotted that this is a scam.
Explain to me how these have got through the net.
I've said many times that I've been quite vocal on this. I believe over the last five,
six, seven years brokers and lenders have done a great job in mitigating application fraud.
What I mean by that is old school, I've got someone else's name, address and details,
producing fake information to obtain finance and someone else's name.
With the systems that are in place now, it's not impossible to get through that.
So the next part of it is that these customers are genuine customers.
They are real customers, so they're able to bypass all of our biometrics,
not only through identification, through other verifications that we do as well,
because they are genuine real people. However, we're led to believe that they are complicit.
Again, it's proving that. So what they're able to do is apply for finance.
Let's just say they take out a £50,000 loan. They will go through the process.
The dealer or the organised crime in the background will have a deal with this customer
in terms of they will be getting paid some of the money out of the advance that gets paid.
Then after two or three months of making payments to the lender,
they will ring up the lender and say, why are you still taking payments out of my bank account?
I never took delivery of this vehicle. Lender goes, oh, sorry, we'll reimburse you for your
payments because you never took delivery of the vehicle. The lender then goes back to broker,
says, customer never took delivery. We need our £50,000 back. Broker says, okay,
let me speak to dealer. Now, the dealer is either gone or the dealer will push back but will
ignore what's going on and just sort of bury their head in the sand whilst they're trying to
get everything else all organised and done. And by the time the broker has been chasing, chasing,
chasing, that dealer is now gone. Money's gone. And it's now left to the broker to pay back the
lender the £50,000. Do you think these consumers then are all these consumers are complicit in this?
They've got to be. How could you not, if you're taking out £50,000 loan,
the monthly payments are going to be north of £5,600. But no matter how much money you're earning,
if you're seeing £5,600, £700 a month coming at your bank for two, three months,
you're going to dopes it. You're going to pick up on it.
I understand the Metropolitan Police are looking into this wider scam. Surely if some of these
consumers are complicit, then the police are going to talk to them.
They are. It's proven that they're complicit. How big do you think this scam is, Dan?
At the minute, there's no stopping it. It can continue. There's no reason why
if a dealer has had enough 15 years, 20 years, or even just a year into the business thinks,
I can get out of this for a quick buck, there's nothing stopping them. There is nothing.
It will continue until there is something that's done. It needs to be what I'm trying to push for
as an industry-wide, whether you're lenders especially, whether you're dealing with the
dealer director who's dealing with us broke, or they should have a process in place that we all
adhere to, i.e., proving that the vehicle does exist and the dealer has to prove that.
That mitigates that bit, i.e., stopping the ghost cars. What we need, the next step is to
mitigate, is knowing that that customer has taken delivery of that vehicle.
Do you think there's some out there who just think this is a victimless crime?
Again, from what I've been told, from what happened last year, there were some dealers that
unknowingly were doing this. There was another part of this process where
a guy ringing up a car dealership had a website. Obviously, it's been done properly. They had a
website. They had cars displayed, although they were probably AI-generated, or they were cars
photographed and then the cars have now moved on. They would ring up a dealership and say,
look, you can see my dealership. I've got these cars in stock, but I haven't got an FCA license.
It's due to come in the next week or two or the next month, but I've got a £50,000 vehicle
here. I've got a customer who wants finance. Who do I run the finance through your business?
You keep the finance commission out of the deal. Just give me the £50,000 advance.
Dealers that are struggling and looking at it going, there's a bit of finance commission there.
I'll do that just for processing paperwork. Once one goes through, a couple more go through,
and before you know it, they're unknowingly complicit in this. Obviously, when the broker
then goes back to that dealer and says, look, I need all this money back, the dealer's gone.
I didn't realise I've been a victim of this and I ended up having to shut up shock, basically.
Often, when it's businesses that lose out rather than individuals,
investigations move a little slower. I know that NAVSIS, the National Vehicle Crime
Intelligence Service, has been investigating, and my sources say they passed a case to the
Metropolitan Police to investigate further. I contacted the Met for comment and they
issued the following statement. We can confirm that this remains an active investigation and
inquiries are ongoing. I pushed them for more information, but they never came back to me.
We'll be following this case closely, and the very latest on it will be shared on our website,
CardiolaMagazine.co.uk. It'll also be in our breaking news WhatsApp groups,
which you can join on the website too. If you like this podcast, you can check out my other
special three-part series called Jaguar rebrand, Mistake or Genius. You'll find it wherever
you're listening to this. And please take a moment to leave us a review and a rating,
as it helps other people find these podcasts as well. Thanks very much for listening,
I'll see you next time, goodbye.
About this episode
A broker describes a ghost-car finance fraud that appears to have drained around £10 million from the market, with one dealership allegedly going rogue and using real customers, fake communications and missing vehicles to push finance through. The discussion traces how scammers keep deals looking legitimate, why some dealers may become complicit, and how the losses hit brokers directly. It also covers the push for tighter checks on vehicle existence and delivery, alongside an active police investigation.
In this podcast we explain how scammers have used ghost cars, rogue dealers and fake finance applications to take the industry for more than £10m. In this special Car Dealer Podcast episode, James Baggott speak to finance brokers hit by the scam, including DSG’s Rob Woollen and Octane Finance’s Daniel Horner, who reveal exactly how the con works and find out why it’s been so hard to stop. This is not a victimless crime. Dealers have lost their businesses, brokers have taken huge financial hits, and even genuine customers have been caught up in the chaos. In this episode, you’ll hear: – How ‘ghost car’ fraud actually works – Why real customers are being used in the scam – The role of rogue (and sometimes unwitting) dealers – How criminals are exploiting the finance system – The scale of the losses — and why it could keep growing – What dealers MUST do to protect themselves The Metropolitan Police has confirmed this is an active investigation — and this could be one of the biggest frauds the motor finance industry has ever seen. Join us as we explain how it works.
