Digital Dealer - February 2018 - 40

FINANCE & INSURANCE

Continued from pg. 39

CHART 2

At an average loss of $24,000 per fraud
occurrence, your dealership is forced
to sell 10 cars to make up for a single
instance of fraud.

ONE OUT OF FOUR
FINANCE MANAGERS
THAT WERE SCAMMED
INSTANTLY KNEW
SOMETHING WAS
WRONG BUT WENT
FORWARD ANYWAY."

robust fraud controls and
screening are able to
limit their fraud liability
substantially and book
thousands of financing
deals without a single
instance of fraud.
There are four things
dealers can do immediately to limit liability.
1. BE AWARE THAT
FRAUD CAN HAPPEN
TO YOU

For every 200 applications for credit, there will
be at least one fraud. So,
do the math. Odds are if
you haven't been hit, you
might be. Train your staff
on what to look for. Make
them aware how common
it is and get them on your
side in the fight against
fraud.
2. TRUST YOUR
INSTINCT, TRUST
YOUR GUT

Dealers know their customers better than any40

FEBRUARY 2018

one. Trust your instinct
when a car buyer enters
the dealership that is out
of the normal pattern.
One out of four finance
managers that were
scammed instantly knew
something was wrong
but went forward anyway.
Trust your gut. If you are
suspicious, perform a
higher level of checks on
that individual.
3. CHECK MORE
THAN IDENTITY.

Checking a driver's
license is a very limited
fraud control. About 85
percent or more of the

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

fraud that will occur may
be related to other types
of fraud such as employment fabrication, income
manipulation, straw
borrowers and other fraud
schemes. Put a fraud
checking program that
looks for more than just
identity fraud.

4. DOUBLE CHECK
INFORMATION

There are many simple
things you can do to
validate information.
 Get the Social
Security Card, ID, and
insurance paperwork and
make sure the informa-

tion is consistent.
 Buy an ID checking
guide. They are $24 and
can instruct you how to
find fake IDs in all 50
states.
 Buy an $8 UV
flashlight that they use at
nightclubs to check ID.
If the hologram is fake
(which it usually is) you
will spot that.
 Check the address to
ensure it matches to the
application and the credit
bureau report.
 Watch for coaching
of the buyer. Fraud rings
will recruit unsophisticated borrowers to act as
stand-ins for the fraudulent
financing.

REACH OUT TO
LENDERS WHEN
YOU NEED HELP

Establishing a partnership with lenders is the
best way to fight fraud.
Since lenders have more
tools to diagnose and
detect fraud, they can help
you understand the impact
to you before it ever
happens. Good collaboration on fraud is the key to
winning the war on fraud.
FRANK MCKENNA is
Chief Fraud Strategist at
PointPredictive, Inc. Frank is
an advocate for fighting fraud
and has worked with more
than 100 banks, lenders and
companies throughout the
world, designing strategies,
solutions and operational
practices that help them
reduce costs and increase
efficiencies. Connect
with Frank on Twitter @
frankonfraud. EMAIL:
fmckenna@pointpredictive.
com.
http://www.DIGITALDEALER.COM
Table of Contents for the Digital Edition of Digital Dealer - February 2018
