Fingerprint Customers?

Not speaking from experience, it used to be that the only time your fingerprints were taken was if you were arrested.

These days, you may find yourself getting fingerprinted for far less. In California, for example, anyone seeking a vehicle sales or dealer license has to go through a process whereby each and every finger is methodically and electronically scanned into a federal computer database.

In fact, just about everyone seeking a professional license in California must go through the process: barbers, locksmiths, real estate agents, and yes, even attorneys!

All this fingerprinting, and yet the Federal Trade Commission says identity theft is still the top-reported complaint for the fifth year running, with more than nine million ID theft victims last year. Collecting fingerprint data only helps prevent that if businesses begin collecting fingerprints during retail transactions.

Is this something car dealers want to take on? Considering the number of vehicle credit transactions each year, dealerships are a logical place to implement retail fingerprint collection practices.

No law bars collecting or retaining fingerprint information for a vehicle transaction. A California bill would require dealers to obtain a thumbprint from buyers.

The question now turns to “should you?” The following reasons are why you should.

It facilitates the capture of ID thieves

The collection of fingerprints can be extremely helpful in tracking down ID thieves. Law enforcement agencies should be much more willing to conduct an investigation on claims of identity theft if you tell them that you have a thumbprint of the perpetrator. A database search could result in a quick match.

It deters would-be ID thieves

Once it becomes known that dealers require thumbprints in order to obtain vehicle financing, there should be fewer people willing to attempt the crime. It sends out the message that dealers are not easy targets. Right now, given a choice between scamming a bank or a dealership, criminals will scam the dealership.

It may assist insurance claims

If you cannot establish that a false identity was used to purchase a vehicle, your insurance carrier may deny coverage. However, a fingerprint taken at the time of sale that differs from the fingerprint of the alleged victim may be proof positive of identity theft and should assist the dealer in recovery from their carrier.

Note: Be sure to contact your insurance carrier to find out 1) What coverage is available in cases of identity theft, 2) What documentation they will require to grant coverage, and 3) Whether accepting fingerprints will result in a premium reduction.

Prints may be collected using the old “pad-and-card” method or perhaps using newer technology. A PC-based system can capture and digitally store a customer's signature, thumbprint and picture. Such a system used by F&I personnel during vehicle credit transactions could go a long way in deterring fraud and identity theft.

It is imperative that fingerprints be protected at least as stringently as the most sensitive of customer information.

If a customer flatly refuses to give you a thumbprint even after you convince them that it is for their own protection, you have a business decision to make. Are you going to lose a deal over this? We know of no lawsuits against dealers (or any other type of business) alleging that requiring a thumbprint for identification amounts to an actionable invasion of privacy. But it would not shock us if a plaintiff's attorney made that argument. Ultimately, a dealership should develop policy as to how such refusals will be handled.

There are many considerations when implementing such a program. Before deciding to collect fingerprints, take your attorney out to lunch and discuss the issue.

Former car salesman turned attorney Rob Cohen is managing partner of Auto Advisory Services, a dealer compliance consulting company.