Digital Dealer - February 2018 - 39
CHART 1
Fraudsters have shifted their focus
to stealing cars through fraudulent
applications because the payoff is greater
than if they focused on stealing a
credit card or forging a check.
tions, those loans could
be subject to dealer
buyback.
When fraud occurs,
it is oftentimes not the
lender's problem, but the
dealership's problem to
resolve which includes
recovering the car.
4. YOUR PROFIT
WILL TAKE A HIT
You should be
concerned with fraud
because of the hit your
profits can take. Car
dealerships that have
had a problem with fraud
in the past report that it
can take an enormous
toll on their profits, and
can take the profit of 10
good loans to recover
the cost of a single
fraudulent loan.
SYNTHETIC IDENTITIES ARE
CATCHING LIKE WILDFIRE BECAUSE
THEY CAN BE ALMOST IMPOSSIBLE
FOR A CAR DEALER TO SPOT..."
all a façade, and those
great looking customers
are nothing but wolves in
sheep's clothing.
2. STATISTICALLY
FRAUD WILL IMPACT
YOU SOMEDAY
Statistically, most
dealers will experience at
least one fraud attempt
this year. If you do the
math, you can easily
forecast your likelihood
of having a fraudulent
loan. For every 200 cars
that a dealer finances, at
least one loan might have
fraud and will impact the
performance of the loan
payments.
If your dealership finances 400 loans a year,
then you will likely have
two cases of fraud this
year that could result in a
non-performing loan.
Keep in mind however,
that some dealerships
become targets of fraud
rings when they have lax
fraud controls. If you are
targeted by fraudsters
because of lax fraud controls, your liability of fraud
on 400 loans could increase to 80 loans! At an
average loss of $24,000
per occurrence, your
losses could increase
to close to $2 million in
liability.
3. LENDERS WILL
HOLD YOU RESPONSIBLE FOR FRAUD AND
EARLY PAY DEFAULT
Most lenders hold
dealerships responsible
for fraud and misrepresentation on applications.
If a loan defaults (particularly within the first
six months), lenders will
often have investigators
scan the application to
determine if information
was truthful. If there are
obvious misrepresenta-
5. FRAUD CAN
SLOW DEALS
Dealers that have
historically high rates
of fraud attempts might
have a harder time
getting speedy financing
for borrowers. If lenders
experience a high rate
of fraud from a dealership, they may begin
to look more closely at
the applications that are
submitted for financing
to ensure that fraud is
not occurring. This can
slow down the approval
process and make it
much harder to close
deals quickly.
HOW TO KEEP
YOUR EYE ON
FRAUD
The good news is that
fraud is preventable.
Most dealers that have
D I G I TA L D E A L E R . C O M
Continued on pg. 40
FEBRUARY 2018
39
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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