How Car Dealers Can Spot, Stop Con Artists

According to the California Highway Patrol, since the COVID-19 pandemic outbreak, vehicle theft investigators and detectives have witnessed a significant rise in auto fraud. 

Professional auto thieves are taking advantage of the current climate, starting with mandatory face coverings that allow fraudsters to more easily conceal their identity.

Some manufacturers’ “no payments for three months” promotions will give criminals an unintended “grace period” to possess and/or sell the vehicle, without the fear of repossession or a timely investigation. More than likely, the vehicle may be a loss before the first payment’s due date, if it’s shipped out of country or VIN switched. 

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Dealerships and lenders working together

For dealers, keeping your staff safe is the first priority, followed by taking measures to identify and address fraud. To combat and stop it before it happens, we recommend dealerships and lenders consider a unified digital identity and authentication approach to compliment your onboarding process, whether online or in-store.

It takes less than 20 seconds to confirm someone’s identity. By allowing customers to take a “selfie” and present it alongside their government-issued ID, you can verify identities in real-time by establishing:

Identification and authentication enable the consumer’s progression toward “everything mobile” and can be used throughout the dealership or on a lender’s website.

State-of-the-art facial recognition, liveness detection, document capture, hologram detection and real-time corroboration ensure dealerships, lenders and OEMs take a balanced approach to security and the user experience, providing easy-to-use, integrated security across the customer lifecycle.

Best practices to prevent a fraud “purchase”

Detectives and investigators at the Orange County Auto Theft Taskforce (OCATT) have provided the dealer-specific indicators to prevent fraud purchases from occurring.

Obtain and utilize an ID scanner/ID verification software, as this software will help detect fraudulent or counterfeit driver’s licenses and connect with the DMV.  

Do not accept a scanned copy or picture of a driver’s license. If the purchaser is attempting an online or an over-the-phone purchase, have the purchaser provide a photograph (selfie) of themselves holding their driver’s license. 

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Accordingly, scammers do not like being videotaped when they are committing crimes. High-definition video surveillance installed in areas where customers sign purchase documents is a deterrent. And it can be used to identify a suspect. If possible, retain video surveillance data for 90 days or longer. 

Ensure all of the buyer’s information matches, from the driver’s license to credit application to the credit report.

A current trend involves suspects using their real driver’s license in conjunction with the Social Security Number of another person with the same or similar name. When their credit is run, the name will match, but the year of birth and address on the credit report is different. If a discrepancy is identified, obtain an explanation from the customer. 

Several credit inquiries, specifically from auto loan companies, within a week or less of each other is a significant indicator. Ordinary people do not allow every dealership they contact to run their credit.  

Require proof of income when any purchaser claims more than $20,000 in monthly income. Professional auto thieves provide a high monthly income to steer the debt-to-income ratio into their favor. Require proof of funds if the suspect is attempting to purchase the vehicle with a personal or cashier’s check. 

Time and place of purchase can be significant indicators. Professional auto thieves and fraud-purchase suspects prefer to take advantage of an online purchase with the vehicle's delivery.

Those that go to the dealership primarily do so on Friday after 5 p.m. or on weekends and holidays. Suspects understand the auto-approval process and take advantage of it during non-banking hours. 

Occasionally, suspects will show up with alleged proof of income, proof of residency, and additional documentation in hopes of speeding up the process. These suspects will refuse a test drive, will not negotiate the purchase price and agree to all extended warranties and vehicle service contracts.

For off-site deliveries, ensure the safety of employees by controlling the delivery location. If the purchasers request delivery to their residence, do not let them meet you down the street.

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Taking the necessary actions on identifying and authenticating actual buyers will create a safer experience for sellers and legitimate buyers. (Ken Kertz, left)

Ken Kertz is FICO’s vice president and general manager-transportation segment.