The police and the FLA have stepped up their efforts at
combating equipment fraud. Will it be enough?
New identification technology has been launched that may, for
the first time, reverse the depressing rise in plant and equipment
thefts.
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The issue of theft has been a concern for years within the asset
leasing industry. But with the changing demands placed on the
police service, with its specialist resources directed elsewhere,
the location, identification and recovery rates of stolen plant and
equipment remain dismally low. However, this supposedly is all
about to change – with the introduction of the Construction
Equipment Security and Registration Scheme (CESAR)
system.
This combines state-of-the-art identification technology linked
to a 24/7 secure and accredited database. It was originally
proposed by the Plant Theft Action Group and has the support of the
Home Office and Association of Chief Police Officers
(ACPO).
Insurance
Each item of equipment protected by CESAR is permanently fitted
with two triangular identification plates that are tamper evident
and contain a unique Datatag transponder. These, and other features
incorporated in the scheme, mean insurance providers will provide
premium discounts for owners and contractors of up to 15 or 20 per
cent when registered with CESAR.
The Construction Equipment Association, the scheme’s promoter,
is the leading trade association representing equipment and
machinery manufacturers, while the CESAR scheme’s operator,
Datatag, is a European player in security identity systems within
the equipment and plant sectors, as well as the leisure and
recreational areas.
In April, yellow goods manufacturer Manitou became the first
manufacturer to fit CESAR as standard to all of its agricultural
and construction equipment. The move was prompted by what Ivor
Binns, Manitou’s chief executive, described as the increasing theft
of agricultural machinery, particularly tractors and telehandling
equipment.”
Ian Elliott, industrial liaison officer at the Metropolitan
Police, believes the UK Finance and Leasing Association’s (FLA)
support for CESAR is crucial. He has sought mandatory support from
FLA members for assets to be tagged under the scheme, although
admitted he was disappointed this had not been granted.
Craig Pickering, an FLA consultant, says the FLA’s asset finance
fraud forum had a useful meeting with the Metropolitan Police this
January and had discussed ways of encouraging members to join
CESAR.
He says:“Members were fully supportive of the scheme, but were
of the opinion that it was preferable for tagging to take place
during the manufacturing process rather than at the point of
credit.”
“It is difficult to see just who would actually carry out the
tagging when lenders are competitively seeking to secure a deal,”
he adds.
Police
Pickering also stresses that it is still early days for the
CESAR scheme, but he predicted it would grow in impact and usage in
the future.
The police have asked the FLA for funding for a new unit aimed
at combating theft in the construction and agricultural equipment
sectors.The forum is to meet later to discuss these issues
further.
Elliott told Leasing Life that, of the £1m worth of
equipment stolen every week, only about five per cent is ever
recovered. The majority of these thefts are conducted by organised
criminal networks that infiltrate construction sites and cause not
only losses, but significant destabilisation and disruption to
major building projects.
“The impending building and construction work inherent in the UK
as the 2012 Olympics approach,” he stressed, “is not lost on the
criminals.”
Asset theft
Tim Purbrick, manager of the National Plant and Equipment
Register, said that, in 2006, 3,500 UK-registered assets were
stolen – and the figure remained largely similar for 2007. “All
indications we have,” he says, “are that 2008 will show an
inexorable increase in stolen assets.
He adds: “Despite the weight of media coverage of equipment
theft, only some awareness is acted upon. A number of manufacturers
are fitting security devices in their factories, plant hire
companies are seeking after-market security devices and some
equipment users are taking more care with site security. However,
with £1m of plant and equipment being stolen every week in the UK
alone, there is a clear message for lessors.”
Whatever the UK’s police and the FLA do to combat asset theft,
the problem is likely to still remain, largely because most stolen
leased equipment is shipped abroad. Furthermore, lessors need to
have a 17-digit serial number to register their equipment with HPI
or Experian. One incorrect digit and the audit trail becomes
impossible. Lenders also should take greater care at underwriting
time regarding due diligence of the customer and the asset to be
financed. The fact UK lessors alone continue to lose millions of
pounds to stolen equipment shows more needs to be done, although
CESAR is likely to be another form of defence for
lessors.
