It’s the peak summer selling season for auto retailers, and fraud prevention is at the top of minds now more than ever. With synthetic identity fraud attempts against auto lenders increasing by 98% in 2023, Equifax and Cox Automotive’s Dealertrack have teamed up to ensure dealers are aware of the latest and greatest fraud prevention measures across every step of the car buying journey. This includes dealing with illegally obtained Credit Privacy Numbers (CPNs), Car Stacking, Multi-Payer Scams, and Test Drive/Loaner Car thefts.
Robert Newman, director of product consulting at Cox Automotive, and Brady Harrison, director of customer analytics solution delivery at Equifax, are on today’s episode of CBT Now to discuss the fraud prevention measures that can be implemented across the car buying journey.
Key Takeaways
1. Synthetic identity fraud involves using fabricated or stolen personal information to secure credit and make purchases. Scammers often create fake identities or misuse real identities to obtain loans and buy cars, sometimes using CPNs (Credit Privacy Numbers) that mimic Social Security numbers.
2. Fraudsters buy multiple cars from different dealerships within a short period before the new loans appear on credit reports, leading to multiple simultaneous car purchases. These involve using legitimate identities to secure credit, making payments with stolen or synthetic identities, and creating fraudulent payment histories.
3. The automotive sector is heavily affected by fraud, with Equifax reporting a 59% annual increase in synthetic identities since 2020 and significant financial losses projected over recent years. The mobility of stolen vehicles further complicates recovery efforts.
4. Modern fraud detection includes digital verification tools that integrate seamlessly into the sales process. Techniques such as identity verification through DMV databases, synthetic identity alerts, and multi-factor authentication for remote transactions help reduce fraud risk.
5. Dealers need to remain vigilant in the fight against fraud. It’s not a one-time effort but an ongoing battle. By incorporating robust fraud prevention tools into their workflows and involving everyone in the dealership, they can ensure better protection and a smoother customer experience.
"Dealers should incorporate robust fraud prevention tools into their workflows and stay vigilant. Effective fraud prevention involves everyone in the dealership, not just the F&I department. Building these measures into daily operations ensures better protection and a smoother customer experience." – Robert Newman.
