Digital Dealer - February 2018 - 38

FINANCE & INSURANCE

By Frank McKenna
Chief Fraud Strategist,
PointPredictive

5 Reasons Car Dealers Should
Be Concerned with Fraud

IN 2018, FRAUDULENT
APPLICATIONS COULD
EXCEED OVER $6
BILLION IN VALUE
ACROSS THE INDUSTRY."

As fraudsters have
shifted their patterns to
focus on stealing cars, it
is having an adverse impact on the lending industry. In 2018, fraudulent
applications could exceed
over $6 billion in value
across the industry. On

average one in every 200
applications could have
fraudulent information
that could lead to a problem with that loan after
funding. But on certain
portfolios and at certain
dealers, fraud rates can
be dramatically higher.
When dealers are being
attacked by fraud rings,
their fraud rates can rise

$6 BILLION OR
MORE A YEAR
IN FRAUDULENT
APPLICATIONS

38

have been able to work
out an arrangement with
the lender when it does
happen. But that could
all change and dealers
should be prepared. Here
are five reasons why car
dealers should be very
concerned with fraud.

Here in the U.S.,
fraud is on the rise in
a big way. Massive data
breaches, like the Equifax
breach, have given
criminal fraudsters
access to more information to defraud consumers and businesses. That
is why we can expect
more fraud perpetrated
and more losses incurred
than any other point in
history.
Fraudsters have set
their sights on big-ticket
items like cars that can
net them 15 to 20 times
the cash value than they
can get from credit cards.
By providing fraudulent
information on applications for car financing,
a clever fraudster can
make a profit of $250,000
or more by shipping highend cars overseas. And
at the end of the day, it's
the dealer that loses the
car in these schemes.

FEBRUARY 2018

1. FRAUD RATES
ARE RISING AND IS
BECOMING MORE
COMMON IN AUTO
LENDING

D I G I TA L D E A L E R . C O M

as high as one in every
five loans.
CAR DEALERS
BE AWARE OF THE
RISK OF FRAUD

Too often, car dealers
are not focused enough
on fraud. Over time,
dealers feel immune
to fraud because they
have not had a problem
with it, or because they

Each year, fraud rates
are rising in auto lending.
As it rises, the odds that it
will strike your dealership
are high.
The fraud rates are
rising because clever
fraudsters have found
new ways to make their
schemes more hidden
and more damaging.
They have developed
new schemes like creating synthetic identities
using stolen social security numbers. Synthetic
identities are catching
like wildfire because they
can be almost impossible
for a car dealer to spot
by just looking at a social
security card. When the
fraudster enters a dealership they often look like
a great customer. Their
credit scores are typically
720 or above, they seemingly have great income
and low debt. But it is



http://www.DIGITALDEALER.COM

Table of Contents for the Digital Edition of Digital Dealer - February 2018

Digital Dealer - February 2018
Contents
Letter from the Show Director
Seven Ways to Become More Coachable
Succession Vision Quest
Diseconomies of Scale: New Normal for Many Growing – Decentralized Groups
The Greatest Opportunity Comes at a Time of Shortage
A Blueprint to Sales Training
5 Ways to Power- Up Your Advertising Effectiveness!
Digital Dealer 24 Conference & Expo Featured Speakers
Pay Plan? I Donno It - I Just Get a Check Dude
EPA Administrator Scott Pruitt: Growing Business and Protecting the Environment
5 Reasons Car Dealers Should Be Concerned with Fraud
10 Reasons Every Dealership Needs a Written Content Strategy
3 Key Metrics for New Car Success in 2018
What the Hospitality Industry Can Teach Us About Dealerships of the Future
Digital Dealer - February 2018 - CT1
Digital Dealer - February 2018 - CT2
Digital Dealer - February 2018 - Digital Dealer - February 2018
Digital Dealer - February 2018 - Cover2
Digital Dealer - February 2018 - 1
Digital Dealer - February 2018 - Contents
Digital Dealer - February 2018 - 3
Digital Dealer - February 2018 - Letter from the Show Director
Digital Dealer - February 2018 - 5
Digital Dealer - February 2018 - Seven Ways to Become More Coachable
Digital Dealer - February 2018 - 7
Digital Dealer - February 2018 - Succession Vision Quest
Digital Dealer - February 2018 - 9
Digital Dealer - February 2018 - 10
Digital Dealer - February 2018 - Diseconomies of Scale: New Normal for Many Growing – Decentralized Groups
Digital Dealer - February 2018 - 12
Digital Dealer - February 2018 - 13
Digital Dealer - February 2018 - The Greatest Opportunity Comes at a Time of Shortage
Digital Dealer - February 2018 - 15
Digital Dealer - February 2018 - 16
Digital Dealer - February 2018 - 17
Digital Dealer - February 2018 - A Blueprint to Sales Training
Digital Dealer - February 2018 - 19
Digital Dealer - February 2018 - 20
Digital Dealer - February 2018 - 21
Digital Dealer - February 2018 - 5 Ways to Power- Up Your Advertising Effectiveness!
Digital Dealer - February 2018 - 23
Digital Dealer - February 2018 - Digital Dealer 24 Conference & Expo Featured Speakers
Digital Dealer - February 2018 - 25
Digital Dealer - February 2018 - 26
Digital Dealer - February 2018 - 27
Digital Dealer - February 2018 - 28
Digital Dealer - February 2018 - 29
Digital Dealer - February 2018 - 30
Digital Dealer - February 2018 - 31
Digital Dealer - February 2018 - 32
Digital Dealer - February 2018 - 33
Digital Dealer - February 2018 - Pay Plan? I Donno It - I Just Get a Check Dude
Digital Dealer - February 2018 - 35
Digital Dealer - February 2018 - EPA Administrator Scott Pruitt: Growing Business and Protecting the Environment
Digital Dealer - February 2018 - 37
Digital Dealer - February 2018 - 5 Reasons Car Dealers Should Be Concerned with Fraud
Digital Dealer - February 2018 - 39
Digital Dealer - February 2018 - 40
Digital Dealer - February 2018 - 41
Digital Dealer - February 2018 - 10 Reasons Every Dealership Needs a Written Content Strategy
Digital Dealer - February 2018 - 43
Digital Dealer - February 2018 - 3 Key Metrics for New Car Success in 2018
Digital Dealer - February 2018 - 45
Digital Dealer - February 2018 - What the Hospitality Industry Can Teach Us About Dealerships of the Future
Digital Dealer - February 2018 - 47
Digital Dealer - February 2018 - 48
Digital Dealer - February 2018 - Cover3
Digital Dealer - February 2018 - Cover4
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