Car finance fraud
When you — or someone you know — is looking to buy a new vehicle, it’s important to be aware of these two common types of car finance fraud:
Guarantor fraud
Being a ‘guarantor’ means helping someone to borrow money, like when they take out a loan for a new car. You do this by promising to pay any outstanding balance or debt if their circumstances change and they can't afford to pay it themselves.
Guarantors are usually needed when someone has a poor credit history or a low or irregular income and isn’t able to take out a loan on their own. There are a couple of ways guarantor fraud can happen. In some cases, someone might convince or pressure you to become their guarantor. In other cases, they might use your details without your knowledge. Either way, you could end up being responsible for repaying their loan if they’re unable to. At Zopa, we don't offer a car finance guarantor scheme. So, if someone's asked you to be a guarantor on their Zopa car loan, it’s likely a scam.
Before signing any guarantor agreements, always remember to read the document in full and in your own time. You should never sign anything under pressure or that you don't fully understand.
Fronting a finance agreement
This occurs when someone takes out a finance agreement in their own name on behalf of another person. Someone will usually ask you to front their finance agreement when they can’t access a loan on their own, either due to affordability issues or a poor credit history. Or, if you’re in a better financial situation than them, they might want to take the loan out in your name to access better interest rates.
Fronting a finance agreement is against Zopa's terms and conditions and is also considered fraud.
If you have concerns around a vehicle you're looking to buy or a dealership you're looking to buy from, please contact us as soon as possible. You can find the best ways to reach us here.
If you think you might be a victim of car finance fraud, you should report it to the police and Action Fraud as soon as possible. You should also contact the lender of the car finance agreement to inform them of the situation, they may be able to help you resolve the issue and recover any stolen money.
How to report fraud
If you think you might have been a victim of fraud or notice a suspicious transaction on your Zopa account, please get in touch.
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Other types of fraud to be aware of
Authorised push payment fraud
Authorised push payment (APP) fraud happens when you're tricked into sending money to a fraudster’s account by someone pretending to be a legitimate person or company.
With this type of fraud, given you’ve voluntarily authorised the transfer, it can be very difficult to recover any stolen money.
Learn moreIdentity theft
Identity theft is when your personal information is used without your permission to commit a crime or deceive a company or person.
A fraudster can use your details to access your online accounts and apply for credit cards or loans in your name.
Learn moreMoney muling
Money muling is a type of money laundering where you’re tricked or paid to receive money into your bank account to give to someone else, likely to cover up criminal or fraudulent activity.
Being a money mule is a criminal offence that could have serious consequences.
Learn moreHow Zopa protects you and your money from fraudsters
Read about the latest types of fraud, how to protect yourself and what to do if you think you've been a victim of fraud.
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