Dealerfloor recently met with three industry experts to discuss the current scourge of dealer fraud. They are Juanette Richardson, chief operating officer of Associated Compliance Motor, Kriben Reddy, Vice President: Head of Consumer and Auto Information Solutions, and Mark Dommisse, chairperson of the National Automobile Dealer Association and Managing Director of North Motor Group.

In the discussion, Kriben noted that TransUnion has seen an increase in identity theft and online scams from the first quarter of this year.

This is a precursor to the attempts at fraud and vehicle theft that we are noticing now, where syndicates use the identities they have stolen, or the new synthetic identities that they have created from pieces of other stolen identities, to apply for finance, buy a new vehicle or recycle stolen vehicles as used vehicles into the sales system.

Mark agreed and mentioned that syndicates are getting very advanced in their methods, often planning a complex scheme that has been planned in intricate detail and then used on dealers in their busiest time, for example, before a weekend or at month-end.

According to Juanette, who shares many interesting examples in the accompanying video discussion, criminals target desperate dealers, who are under severe pressure to make a sale and put food on the table. At the same time, these criminals thrive amidst the many sales campaigns currently underway, with buy now, pay later deals and cash back deals a perfect opportunity to scam a dealer out of a new car.

Among the many examples mentioned in the discussion, is the regular practice of using homeless or down-and-out individuals to buy a car or set of cars. These individuals obtain a bank account where money is deposited and withdrawn regularly, creating a financial history. This person is then sent to buy a vehicle, hand it over to a syndicate and then collect a payment of a few thousand rand for their trouble.

Watch the panel discussion here:

Kriben notes that a dealer environment is very complex, creating many opportunities for theft and fraud. To counter this, dealers are encouraged to use the many tools that check vehicle and buyer identity, financial background and even the age of the buyer’s digital profile. This is of course also done to protect the buyer, or the individual whose identity might have been stolen.

While some of these tools carry a usage charge, these charges are negligible when compared to the loss of a new vehicle to a scamster.

Juanette and Mark reiterated in the discussion that process is king. Train both the Finance and Insurance Manager (F&I Manager) and the sales team regularly, have a fixed and robust client take-on process in place and make sure to check credentials on site, do not do it off site during hand-over.

By religiously applying the rules for the client take-on process, using the tools available from your finance provider or a company like TransUnion, getting the information directly from the source – whether that is the buyer or the relevant holder, like the department of transport – and then trusting your gut, you can protect yourself and your dealership when the criminals target your town.

• Dealerfloor is currently compiling the information shared in this video and related information from banks and other service providers into a handy, downloadable PDF. Visit us again soon to access this information for free.