A growing challenge dealers have faced for decades is identity theft and fraud. And as technology grows more sophisticated today, so do the hackers. In this first part of our 3-part series with Aura and Mosaic Compliance Services on Driving Solutions, we’ll further discuss identity theft and fraud and how Aura and Mosaic Compliance Services formed a partnership as a real value to the retail automotive community.
Key Takeaways
1. Scott Hudson, Senior Vice President at Aura, and Jim Ganther, CEO and co-founder of Mosaic Compliance Service, identify theft and fraud as significant issues affecting car dealerships, with examples including using fake IDs for test drives and loan applications. These fraudulent activities not only lead to financial losses but also have long-term impacts on consumers and dealerships alike. The sophistication of hackers has increased with technological advancements, making it a persistent and growing threat in the industry.
2. Beyond financial losses, dealerships face considerable reputational risks when breaches occur. Even when a dealership follows all required safeguards and mitigates the impact of a breach effectively, it can still suffer from negative publicity and potential lawsuits. This reputational damage can deter customers from doing business with the affected dealerships, regardless of their actual security practices.
3. The interview highlights the importance of dealerships adopting robust security measures to protect consumer data. The partnership between Aura and Mosaic Compliance Services aims to offer comprehensive protection for car buyers and dealerships. By providing identity theft protection and compliance services, dealerships can assure customers that their personal information is secure, thereby enhancing trust and potentially turning compliance from an expense into a profit center.
4. Compliance should be viewed not as a burden but as a competitive advantage. By proactively offering identity theft protection to all shoppers, not just buyers, dealerships can demonstrate their commitment to data security. This proactive stance can help differentiate a dealership from its competitors and build customer loyalty. Additionally, compliance services can be seamlessly integrated into the dealership’s operations, with costs potentially offset by enhanced consumer trust and satisfaction.
5. Current and pending legislation places significant obligations on dealerships to protect consumer data. The interview mentions the “red flags rule” and the “safeguards rule,” which impose specific requirements on how dealerships must manage and protect personal information. Dealers must stay informed and compliant with these regulations to avoid legal repercussions and mitigate risks. Continuous education and adaptation are necessary as new threats and regulations emerge.
"We need to begin to think about not only traditional theft but also emerging theft, and how people can not only use the car to commit much broader fraud." – Scott Hudson
