Are You Taking the Necessary Steps to Prevent Identity Fraud in your Dealership?

identity fraud

Every time we turn on the TV or log into a news app on our phones, we are reminded of how easy it is to become a victim of identity fraud. Tens of thousands of people each year have their identity stolen in the process of major purchases like buying a car…the most common crime is using a social security number to open credit. All because an ID was copied or someone took a picture of a credit application with their smartphone.

At a dealership in Montana, a salesman stole identifying information from a customer’s credit report. He was only caught after charging over $6000 in purchases on an American Express card he opened in his own name. Not the first time, though, as it turned out that he was also wanted for a similar case in Texas where he had obtained credit cards and fraudulently charged over $100,000 while living in that state.

Guess what? It can happen at your store, too.

Let’s take a look at 4 simple measures any dealer can take immediately to prevent identity fraud:

  • A Secure Office– Did you know that in any case of identity theft or fraud that occurs through a car sale, the dealer is always held liable? Many in the industry are shocked to hear that (crazy, right?) but that one crime alone can have a profound financial consequence for your dealership. And it goes beyond just making sure the ID is an official state-issued card.

Where you handle a consumer’s sensitive information is more important than you think. Be sure to limit access to the F&I office for example…make it clear who is allowed in the office and who is not. Outside of management, no one should be in the office alone with access to deal folders that have personal information that could be written down or scanned with a smartphone. Be vigilant and watch for nervous behavior or salespeople walking off with the deal jacket. It should never leave the floor, the sales tower, or the F&I office.

  • Don’t Forget Storage – Some dealers are very good at the ‘front end’ of securing documents but then forget that how you store the personal information can also be important. Again, employees who may have access to the deal folders after the sale can also copy information such as Social Security numbers, addresses, or other credit-related data. Don’t leave them sitting in a stack on your desk. Keep deals under lock & key after funding and after any internal audits are complete. Locked file cabinets and vigilance amongst the staff can be the best safety net.
  • Disposal – So you did not get the deal done on that used Lexus…what do you do with the credit application and credit report? Throw it in the trash next to your desk? Does your F&I manager throw it away in their office and move on to the next deal? You better think twice.

Your store could desk a hundred deals that never get done and what you do with that paperwork is critical to protecting your store and the consumer. If you don’t have one now, invest in a large office shredder. It will be your best weapon against people that ‘dumpster dive’ looking for personal information in the trash. If a folded or balled up credit application is stolen, your consumer could be at risk of identity theft.

Shred everything to be safe, both after the shopper leaves and in accordance with whatever your internal policy is on aged deals.

  • Make Careful Hires – Who you hire matters. There are cases where identity thieves have intentionally hired themselves into dealerships to be able to access consumers personal and financial information. If your dealership is not already conducting background checks before hiring, start today. And even if an applicant is clear, call a couple of the references to be sure. Think about the earlier story of the salesman wanted in another state for credit fraud…

Consider letting your customers know upfront that your store has strict standards for privacy and ID security…they will have a deeper sense of trust and what dealer couldn’t use more of that in this business?