Vehicle Rental: The threat of terrorism, county lines and theft

With the recent rise in the use of vehicles as weapons, the increase of ‘county line’ drug dealing using hired cars and an alarming acceleration of high-value rental car theft through identify fraud, rental companies are facing a three-fold challenge which could cost them hundreds of millions of pounds. Indeed, the cost of reinsurance following the Westminster Bridge van attack of 2017 alone was reported to be ‘eye watering’ – and the damage to profits and reputation could potentially be irretrievable.

So how can the industry address this triple threat to their business? One major car and van rental company is already leading the way in risk mitigation with an advanced, real-time hirer screening solution.

In the latter two events, the name of the hire company was clear to see on television and in the press and social media – highlighting the chosen method of the attackers, to rent a vehicle and use it to maximise deaths and injuries.

The growing risks and challenges facing the car and van rental industry

A series of very tangible threats to the industry is developing rapidly, in an environment where security of all sorts is becoming more and more of an issue – in terms of cost, time and reputational damage.

The UK car and rental sector - an outline

• Over 500,000 cars, vans and trucks managed
• 15.5 million rental transactions each year
• 10.9 million car rentals
• 4.6 million van rentals

What’s it all about?

The last year or so has seen a string of serious incidents of cars and vans being used as deadly weapons all around the world, from the USA to France and Sweden – with hundreds of deaths and thousands of injuries. Not all of these incidents are related to terrorism, but the most deadly are. As far back as 2010, al-Qaeda encouraged its followers to use vehicles as ‘mowing machines’ to attack people.

In the UK there were three terror attacks using vehicles in London between March and June 2017 alone. In March, a terrorist drove his rental car into pedestrians on Westminster Bridge – 5 died, including a policeman stationed outside Parliament, and scores of people were injured.

Early in June, a rented van drove into pedestrians at London Bridge, followed by a rampage on foot at Borough Market. Eight died and 40+ were injured. Later that month, another hired van was driven into a crowd outside a mosque in Finsbury Park, with one fatality.

Many of these attacks have involved the use of rental vehicles as weapons. The UK rental sector believes that these attacks also pose a significant threat to its ability to provide customers with an affordable and convenient service.¹

In the latter two events, the name of the hire company was clear to see on television and in the press and social media – highlighting the chosen method of the attackers, to rent a vehicle and use it to maximise deaths and injuries.

The cost is seen not just in the tragic loss of innocent lives, but in the safety, security and peace of mind of the general public.

The challenge to the vehicle rental sector

The car and van rental sector recognises its responsibilities and is ‘determined to work with law enforcement organisations and policymakers in developing an effective and proportionate response to this challenge, exploring both operational and regulatory options.¹

Putting new due diligence systems in place will come at a price of course. And for businesses operating in the sector there are substantial additional costs.

Across the sector, it is common knowledge that insurance liabilities and reinsurance cost a major company and their insurers several hundreds of millions of pounds after one of their vehicles was used in a London attack.

Costs come not just from physical damage, but other factors not covered by insurance – after the Borough Market attack, for instance, stall holders lost 11 days of trading, an issue which deeply concerns the reinsurance industry as seen by the response from Pool Re shown in the panel to the right. Some insurers have increased their premiums or withdrawn from the market.

On top of that comes the reputational damage, both to individual companies and to the industry as a whole.

Now, an efficient and cost effective solution to some of these risks is emerging – and has already been trialled and adopted by one of the leading companies in the UK and European markets, in order to screen hirers at the point of hire with identity checks and risk scoring as detailed later in this paper.

How the reinsurance industry has reacted

"The reinsurer is currently restricted by the 1993 Act only to pay out if physical damage has occurred to commercial property. This means that businesses, inside a police cordon, that suffer financial loss through being unable to access their property or to trade, are only covered if there has been physical damage during a terrorist attack."

“Pool Re had identified the potential protection gap as a result of the spate of attacks across Europe in 2015/6. However, the terrorist attacks in Westminster, Manchester and London Bridge highlighted the actual impact of the gap in UK provisions for terrorism insurance coverage."²

County Lines – the drugs trade

The National Crime Agency (NCA) estimates there are more than 720 of the lines across England and Wales alone, becoming a valuable brand that is protected with violence and intimidation.*³

*Officials said the actual figure could be far higher and that county lines are present in every police force area, with three quarters linking them to the exploitation of children and vulnerable people with mental or physical health issues.

What's it all about?

‘County lines’ is the name given to the rapidly-growing trend for drug dealers to extend their reach beyond urban hubs like London, Birmingham, Manchester, Liverpool and Glasgow into rural areas – the counties – where they are increasingly taking over from local gangs and syndicates and flooding the area with drugs including heroin and crack cocaine.

These dealers use a branded mobile phone number ‘line’ to take orders and courier the drugs. Hire cars are one of their preferred modes of transport to travel between the urban hub and the county market, to deliver stock and transfer cash.

Dealers exploit young or vulnerable people for the storage and supply of drugs, movement of proceeds and to secure the use of dwellings as a base for their operations (commonly referred to as cuckooing, as they take over a vulnerable person’s home).

The challenges to the vehicle rental sector

Recent statistics, covering all 43 territorial police forces across England and Wales, show that 51% (22 forces) report the use of hire vehicles to carry out illegal drug dealing.

51% of police forces report the use of hire vehicles to carry out illegal drug dealing

The vehicles of choice are often small high performance cars, with anecdotal evidence that the dealers ‘case out’ depots to identify the specific vehicles they want. With criminal activity like this, there is a high level of identity fraud at the time of hire – and the vehicles are often driven recklessly at high speeds and ‘trashed’ particularly when police pursuit takes place.

With criminal activity like this, there is a high level of identity fraud at the time of hire – and the vehicles are often driven recklessly at high speeds and ‘trashed’ particularly when police pursuit takes placema.

The County Lines problem is growing rapidly across the UK – the vehicle rental sector needs to respond effectively and quickly.

High value rental car theft

Methods used to steal vehicles include...the use of fraudulent documentation and cloned credit cards to hire vehicles."⁴

What’s it all about?

Car theft is on the rise again – by 20% in 2017 alone – with high value vehicles being the most common target.

The stolen vehicles are often destined for foreign markets including the Middle and Far Eastern continents as well as parts of Africa. Closer to home, many stolen vehicles are still broken up and the spares sold in the long established and lucrative black market trade.

A growing number of cases involve identity fraud, with false ID and identity documentation being used and the vehicles being rapidly transferred to containers – concealed by smaller, legal goods – loaded onto ships and sold across the globe.

In other cases, the vehicles are loaded onto trailers and sold in the UK or stripped down to parts.

The challenges to the car rental sector

Car theft is a major factor in the cost of insurance, particularly at the high end where vehicles can cost up to above £100,000. As noted earlier in the paper, this is mitigated when the hirer takes out insurance through the rental company – but not when the hirer has obtained the vehicle fraudulently, reflected in increased premiums or declined claims.

Rental companies have to take larger and larger deductibles to offset the increase in premiums as a result of vehicle theft cases – with a direct effect on their bottom lines.

There is currently little opportunity to screen people who walk in to local offices and request a car for immediate hire – especially at airports and large scale locations – making fraudulent hire easier to achieve.

Hirers have to provide driving license and credit card details for validation purposes but few background checks are available in terms of the risk that person presents.

There is a real need for a system which can provide in depth identity and risk checks in real-time at the point of hire – once the vehicle is driven away, it is too late.

With every sort of fraud in the car rental business – and even in the case of hired vehicles being used as weapons – there is evidence that fraudsters use the age old technique of the ‘person on the inside’ to commit crimes, planting an accomplice or accomplices within the company, usually on the front desk. This might be on an individual level, or on a highly organised and sophisticated basis.

Can rental companies be sure their vetting processes are truly effective?

Effective real-time hirer screening at the point of hire – an advanced solution

Introducing SIRA...

SIRA is a comprehensive fraud and risk prevention and detection solution from Synectics Solutions.

It is already successfully deployed in a large number of insurance and financial service companies throughout the world, and is now being introduced to the vehicle hire sector.

The system brings together a multitude of machine learning algorithms and comprehensive workflow management to put real control into the hands of front line teams.

• SIRA has been known to create as much as a 30% uplift in high risk policy identification for insurance clients.
• In the UK, SIRA holds around 1.5 million adverse records.
• The National SIRA database is growing at a rate of >35,000 entries per month.

The Vehicle Hirer Screening Solution has already been trialled and deployed by one of the UK’s leading car and van rental companies, in response to the challenges and threats outlined earlier in the paper.

SIRA immediately and efficiently enhances screening of hirer details in real-time – both for pre-booked and on site walk-in locations – to save you time and money, and reduce risk.

What the Vehicle Hirer Screening Solutions offers you

The SIRA Vehicle Hirer Screening Solution immediately and effectively addresses the needs of vehicle rental providers who are looking to enhance their fraud protection and risk mitigation.

• It provides you with a real-time check against local, cross sector, national syndicated and external data sources at point of hire in your customer facing sites.
• Its user friendly interface provides site operators with an intuitive risk screening tool with configurable on-screen responses for assessing risk associated with walk-in hires.
• Unlike other systems, there are no IT resource demands for customer facing sites as it is a web based platform.
• The on-site offering is backed up by a pre-booked hire, batch screening application with full workflow, tasklist and investigation functionality.
• The Hirer Screening solution utilises SIRA’s unparalleled data agnostic approach and proven abilities in counter fraud / risk validation screening, combined with in-depth understanding of multiple markets.
• Employee Vetting and ID Verification enables you to screen potential and existing employees against a combination of National SIRA and other third party data sources.
• The system means that the hire company can check hirer identity and risk ‘on the spot’ with a real-time on-screen clear or not clear response and red, amber or green risk rating.

Key benefits and features

• Reduction in potential fraud and risk exposure to the business by screening at point of walk-in hire at site locations as well as batch screening of all pre-booked hires.
• Risky or fraudulent would-be hirers are instantly identified, and genuine hirers are cleared faster and with less stress.
• Real-time screening.
• Single, dedicated manual entry screen for ad-hoc checking of walk-in hirers.
• Configurable rules to screen against local, cross domain, national syndicated and external data sources (see additional data services below).
• Real-time clear or not clear response for front line staff.
• Additional on screen messages / scripts configurable on request.
• In built workflow process, referrals investigation tasklists and MI reporting.
• Additional and configurable Case Management and DocuStore modules to help with the management of information and data.

Across the sector, it is common knowledge that insurance liabilities and reinsurance cost a major company and their insurers several hundreds of millions of pounds after one of their vehicles was used in a London attack."

Additional external data services and checks

• Criminal Intelligence(fraudulent ID data).
• DDRI(deceased register).
• Public Sector (including failed asylum seeker data).
• Sanctions and Politically Exposed Person data.
• ID verification.
• Commercial and Companies House intelligence.
• Device ID.

Conclusion:

Why is it important that you consider Vehicle Hirer Screening Solution without delay?

Today’s fraudsters, and terrorists, are extremely sophisticated. They are always looking to stay one step ahead of the game, so that when one window of opportunity for their criminal activities closes, they are already looking into the next one.

As opportunists, they will take the easiest path to achieve their aims. Now that one leading car and van rental company has the SIRA solution blocking their way and making rental difficult or impossible for them, they will move on to another. And another, when their previous choice has the solution in place.

As their options narrow, the burden and cost of fraud and criminal activity will increasingly fall on the late adopters of effective screening. It is an ongoing battle, but the SIRA Vehicle Hirer Screening Solution will put you on the front foot in the fight against crime and fraud. Our solution is constantly evolving to meet new threats and challenges. Can you afford to be without it?

For more information about the Vehicle Hirer Screening Solution from Synectics Solutions and how it can be used to help your organisation reduce the risk and liability of crime and fraud, call 01782 664000, email info@synectics-solutions.com or visit www.synectics-solutions.com

References

1. BVRLA (British Vehicle Rental and Leasing Association) report: Vehicles as weapons: a threat and policy assessment for the UK vehicle rental sector, Executive Summary (March 2018)

2. www.poolre.co.uk/pool-re-hails-government-action-close-terrorisminsurance (22 March 2018)

3. The Independent (28 November 2017)

4. NCA ‘Stolen vehicles worth £1.2million recovered at UK ports (20 October 2014)