Page 34 - GIADA-Jan-2018-Final

To Catch a Thief: Detect Fraud With the

Red Flags Rule and OFAC

“If you tell me your name and date of birth, that’s all I need to steal your

identity” —Frank Abagnale, Catch Me If You Can

By John Stephens

“If you tell me your name and date of birth, including insurance cards, driver’s licenses, lock it. Reinforce the importance of not
that’s all I need to steal your identity,” said Social Security numbers, and information leaving confidential information on desks,
Frank Abagnale in the book Catch Me If from credit checks. The fine for personal copiers, or in trash cans; implement daily
You Can. information remaining in public view is checks to ensure compliance; and address
$40,000 per piece of information per day. problems before they become issues.
Although you might have rooted for
Leonardo DiCaprio’s scrappy rendition When a salesperson throws a copy of Because of people like Frank Abagnale,
of Abagnale in the movie version, the last a driver’s license in the trash or leaves dealerships are required to have processes
thing any dealer or F&I manager wants to an insurance card copy out on a desk, it to prevent fraud, and keep specially
face is identity fraud. could cost the dealership $80,000. Costs designated people from accessing U.S.
rise exponentially when more than one financial systems.
Getting caught in an identity scam can salesperson does the same thing on
cost hundreds of thousands of dollars in multiple days. Two specific processes with significant
lost inventory costs, plus legal fees and jail repercussions for noncompliance include
time if the dealership did not conduct due Dealers have done a decent job of making the Red Flags Rule and the Office of Foreign
diligence. sure F&I managers lock their offices, store Asset Control.
deal jackets in locked file cabinets, and
So, what can a good F&I manager do? How use auto-lock on computers when people Red Flags Rule
can you be sure of a person’s identity when step away from their desks. It’s equally Under the Red Flags Rule, created by
he or she is sitting in front of you? important, however, to train sales staff on the Federal Trade Commission (FTC),
keeping information private. dealerships must have an identity theft
Protecting nonpublic information prevention process (ITPP) in place.
Dealerships are required to secure and Train salespeople how to deal with private Noncompliance penalties are $3,500 per
protect all nonpublic information, information—how to take, copy, store, and violation, plus injunctions.

32 | GIADA Independent Auto Dealer JANUARY 2018