Help ID-Theft Victims

Problems with consumer identity theft have become huge. Now an interesting new F&I product enables dealers to offer consumers protection and relief if they become victims.

Identity theft occurs when someone's social security number, name, address, credit card or bank-account number or other personal information is taken and used to commit fraud or other crimes.

The Federal Trade Commission says about 27 million Americans have been victims of identity theft from 1999-2003, with 9.9 million in 2003 alone.

Personal information is often taken from garbage, mailboxes and fake Internet sites. There are internal business thefts as well. The financial impact and losses can be substantial, not to mention the incredible hassle of trying to restore credit.

ID Advocates of Phoenix, AZ, has experience working with banks and insurance companies developing products that have been sold to customers as part of their homeowner's insurance or bank-account and credit-card monitoring services.

Now, the firm has adapted these products for the dealership F&I department.

In the F&I office, the customer is able purchase two different tiers of membership in an identity-theft management and monitoring service. This product is not limited to their auto loan or lease, but applies to any identity theft that the customer might experience.

Both programs provide for a fully managed credit and identity recovery for the customer, guaranteeing their credit and other impacted areas of their life will be restored to the condition prior to the theft. In a premium tier, the recovery service is coupled with a $20,000 insurance policy that reimburses the customer for any losses, as well as ongoing bureau monitoring. The membership lasts a year, and is renewable.

Dealer cost for the basic program is expected to run below $50. Dealers will also be compensated for any renewals, with ID Advocates handling the marketing and customer follow-up.

Most customers are aware of the problem that identity theft presents, but likely have never been offered a solution, or have little idea of where to turn if victimized.

Dealers can provide this protective service at the moment most consumers are acutely aware of their credit — while applying for an auto loan or lease — as well as the consequences of maintaining a good credit score and profile. It is an excellent time to present this program.

Since the consumer is enrolling in a membership program, not purchasing an insurance product, additional F&I licensing is unlikely required. At this moment it is available in 49 states, with New York being the only exception due to the insurance underwriter being based there.

So, for a small bump to their monthly payments, car customers can gain substantial protection and some peace of mind.

This program has recently been launched with several large dealers in the Southwest, and is now ready for nationwide roll out.

Some dealers have experimented with bundling the product with service contracts or roadside services to offer a full protection solution.

Adding this to the existing F&I menu is essential for sales success. As with any new product, F&I staffers can sometimes be reluctant to offer something with which they are unfamiliar or uncomfortable initially presenting.

In certain ways, this F&I opportunity potentially is like GAP (guaranteed auto protection) was seven or eight years ago: a solution to a high visibility issue with significant profit for dealers. While looking for new products to offer in F&I, this might be one that would fit well for your dealership.

Bryan Dorfler is a finance & insurance consultant. He's at [email protected].