Leased asset management company The Asset Works (TAW) has created a global asset price verification database which it hopes will protect the industry from "grossly inflated values" and related reputational issues.
The product, called Asset Inception Check, has been developed with asset valuers from Jones Lang LaSalle, who will provide much of the price information, and with the support of the UK’s Finance & Leasing Association (FLA).
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David de Silva, a director of TAW, said the database is the only resource globally providing up-to-date asset prices from manufacturers, auction houses and used equipment dealers and covering, with the exception of automotive assets, the majority of leasable equipment.
De Silva said the database was created in response to FLA’s concerns around risk and reputation following a television documentary following schools which had signed leases for equipment at hugely inflated prices.
Lindsay Town, chairman at TAW, said: "The Panorama programme last November highlighted the difficulty lessors have in preventing assets with grossly inflated values slipping into the system.
"Traditionally, with the breadth and volume of assets it has been phenomenally difficult, if not impossible, to solve this issue.
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By GlobalData"It will now be possible to check each and every asset to ensure that it falls within the correct pricing parameters."
The database will be available online and later, it is hoped, the service could be integrated into lessors’ systems.
De Silva added he hopes the product will "help the industry in those areas where it has been exploited before" and "weed out price anomalies."
"What it will enable lessors to do is protect against reputational issues and therefore offer protection to clients as well", said De Silva.
He added the product "would not exist" without the help of the FLA.
Julian Rose, head of Asset Finance & Data Policy at the FLA said: "While lessees negotiate prices for equipment with suppliers, finance companies will want to review what has been agreed as part of their risk mitigation checks before taking on new business.
"The Asset Inception Check, developed in response to a need identified by the FLA’s Operations Group, is an important new tool to help enable prices to be sense-checked before finance is offered."
The product is currently in a "soft launch" with launch customers HSBC Equipment Finance, Societe Generale Equipment Finance, and Investec Asset Finance providing feedback and guidance before the product is opened to the wider industry in the third quarter of the year.
Andrew Higgins, risk director at Investec Asset Finance, said: "We are pleased to be working with The Asset Works as a launch partner of the Asset Inception Check which we hope will be a great initiative, helping to reduce fraud and provide more accurate information on equipment pricing and on-going value."
A spokesperson for HSBC Equipment Finance Credit and Risk Department said the firm was pleased to be part of the development and added: "It offers a potential way not only to improve customer service but also to protect the interests of both customers and funders. Ultimately this may help to keep everyone’s costs down, which will be widely welcomed."
De Silva said the product, which will report in US dollars, euros and pounds sterling, would initially be available in the UK but TAW intend to roll it out across Europe.
