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.
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 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.
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.
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.
*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.
‘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).
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.
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.
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.
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.
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.
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.
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
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)