Cross-border fraud due to registration differences

Viesturs GurtlavsLatvian Lessors Association

Prague, 3 February, 2012

Agenda.

• Market

• Fraud influence

• Solutions

Market

New sales in Latvia 2004.-2010.

Leasing portfolio in Latvia 2004.-2010.

Market situation 2008.-2010.

• State economy went to deep crisis. That resulted an overall decrease in all businesses.

• Decrease in demand for transport services.

• Formerly good customers went to or close to insolvency.

• Restructuring of lease contracts.

Attitudes of unsuccesful customers.

• Try to deal with Leasing company for restructuration of contract.

• To return assets.

• Try not to return assets.

• Criminal actions.

• Fraud influence

Criminal actions.

• Insurance fraud.

• Hiding of asset.

• Moving of asset to another country.

Visible stages of possible illegal export.

• Possible payment delays (not obligate).

• Change of company management and/or owners.

• Sudden lose of any contacts, phone, e-mail, e.t.c. no information about vehicle.

• Vehicle has no valid insurance / no regular technical inspection.

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Unvisible stages of possible illegal export.

• Movement of truck, trailer or car to another country.

• Several owners / resellers until “end” purchaser/user.

• Based on falsified sales documents, registration in other country.

• Application of first (legal) owner (leasing company) when the asset appears to be stolen.

Registration problems.

• Different countries- different rules for registration.• Only purchase documents.• Application by post.• Informing of “previous” country within

several times.• Other.

• Register agencies not always check legal status of asset in “original” country.

Registration problems.

Registration problems.

• Only few countries exchange information in Eucaris.

• Belgium, Estonia, Germany, Hungary, Iceland, Ireland, Latvia, Lithuania, Luxembourg, Romania, Slovakia, Sweden, The Netherlands and the United Kingdom

Consequences?

• For legal owner- lost of assets and a big potential for insurance rejection.

• For “new” owner- potential risk of lost of money.

• If found, very long and expensive procedure of recovery, legal costs, translation e.t.c.

• Risk of using of asset in crimes and as result confiscating of asset.

Solutions

How to reduce potential risk from present customer?

• Continuous and permanent monitoring of all customers, if such is possible.

• Immediate reaction in cases when potential illegal action indicates.

• Personal guarantees from owners/management.

• GPS tracking (especially in rent cases).

How to escape from purchase of such used assets?

• Ask seller for:• Previous registration and origin

documentation.• Ownership of himself.

• Customer related with seller...

• Trustful evaluation of asset. For example in Czech republic- CEBIA. In Latvia AR-Control. Members of IAATI . If seller rejects...

• As well as Search engines for VIN.

Before and after....

Suggestions

• Continuous control and checking.

• Use of evaluation services for any used asset.

• Cooperation with Vendors for history checking.

• To promote that your country completely joins to Eucaris.

Thank you!