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SA dealership fraud 'significant'

2012-02-16 10:07

SIGNIFICANT FRAUD: Participating dealerships in the Sewells survey reported that the majority of theft and fraud occured in servicing and parts departments.

A survey of internal fraud and theft taking place at South African vehicle dealerships show that the incidence of criminal activity is significant, says Tania Barlow of Sewells Group South Africa.

The Sewells group, a specialist training and consulting company in the automotive sector, urged dealerships to participate in a "Fraud and Theft Health Check".

THEFT AND FRAUD

Barlow said: "Empirical evidence which emerged from our study in 2011 shows clearly that the losses involved are substantial.  We also concluded that prevailing social and economic climate is quite likely to stimulate more opportunism in this regard.

"The impact of internal fraud and theft on dealer profitability cannot be under estimated. We believe that tabling what we have established thus far will assist in identifying the frequency incidents, and give a pointer towards where one should be looking for problems."

SA dealership fraud

SA DEALERSHIP FRAUD: A table released by the Sewell group shows cash theft (35%) as the highest incidences reported with non-cash (parts, vehicles etc) coming in second at 28%.

In 2011 the Sewells Group had collected data from dealerships which showed that nearly three-quarters of the respondents had experienced fraud or theft and 77% had been victims more than once . The nature of the incidents is described in table C where the theft of cash and non-cash assets (like parts) is the most prevalent.

Barlow said: "Clearly this is a red flag indicator of risk and there is a need for preventive measures in these two areas."

The highest frequency of fraud and theft occured in the service and parts departments. More than 50% of fraud  and theft incidents have a value of less than R50 000.

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