Auto dealerships may sell dreams of open roads and freedom, but unfortunately, they also attract a different kind of customer: the identity thief. With high-value transactions and access to sensitive personal information, auto dealerships are prime targets for various fraudulent schemes. So, buckle up as we explore the most common types of identity fraud impacting dealerships and how to keep your wheels safe.
Four common fraud schemes dealers need to be aware of
1. Third-Party Identity Fraud (Stolen Identities): Hijacking the Identity Highway
This method doesn’t involve creating new identities; it steals existing ones. Thieves steal personal information, often through data breaches or phishing scams, and use it to apply for auto loans under the victim’s name. The dealership unwittingly approves the loan, leaving the real person saddled with the debt and a ruined credit score.
2. Synthetic Identity (Fabricated Credentials): Frankenstein Fraud on the Fast Lane
Think of synthetic identity fraud as identity theft with a twist. Criminals combine real and fake information, like stolen Social Security numbers and fabricated addresses, to create entirely new personas. These fabricated identities then build clean credit histories, allowing them to qualify for high-value loans like car financing. By the time the dealership realizes the fraud, the car, and the fake persona have vanished.
3. First Party: No Way Will I Pay
This method doesn’t involve creating new identities; rather it is when a person knowingly misrepresents their identity or gives false information for financial or material gain. Fraudsters often have no plans to pay for their vehicle.
4. Document Fraud: Paper Trails of Deception
Fraudsters can also manufacture fake or altered documents like driver’s licenses, proof of income and employment verification. These forged documents create a veneer of legitimacy, allowing them to bypass dealership verification checks and secure loans based on fabricated information.
Four ways dealerships can keep their brakes on fraud
1. Robust verification: Implementing multi-factor authentication, cross-referencing information with reliable sources, and verifying documents with advanced technology can significantly reduce the risk of deception. Fraud Protect™ from Experian Automotive leverages license scanning and selfie capture to verify identity. Dealers can find the true person and verify the activity through device, behavior, and step-up services.
2. Employee vigilance: Training staff to identify suspicious behavior and report potential fraud attempts can create a strong internal defense system. Fraud Protect fits within your current systems and processes. The software integrates with your CRM and does not require heavy software training or any additional hardware simplifying employee usage.
3. Secure data: Investing in data security measures like encryption and access controls can significantly deter hackers and minimize the damage from data breaches. Fraud Protect leverages Experian’s world-class data to handle the customer relationship carefully and detect errors and discrepancies.
4. Partnerships: Collaborating with credit bureaus, law enforcement agencies and fraud prevention systems can provide valuable insights and resources for fighting fraud. Experian is the world’s leading information services company. Fraud Protect from Experian Automotive offers a unique partnership for dealers through seamless CRM integration. This simple process makes multiple levels of risk identification quick and efficient for busy buyers.
By acknowledging the various forms of identity fraud and implementing proactive measures, dealerships can protect themselves and their consumers from the impact of identity fraud.
Fraud Protect empowers dealers with our leading fraud, identity and verification capabilities, integrated within your unique workflows. Whether on your website, leveraged before test drives, initiating out-of-state & and remote closings, or before contracting, Fraud Protect quickly uncovers potential fraud. The entire process is a quick and painless way to address risk while establishing customer trust.
Take the first step in protecting profits and preventing fraud by visiting our auto fraud prevention solutions webpage.
