Page 35 - GIADA-Jan-2018-Final

TO CATCH A THIEF

There are four elements of a good ITPP: By checking this list, businesses help keep The dealership’s process for
1. Identify Red Flags. This is most often certain individuals, foreign governments, handling SDNL compliance
done using software for credit reports financial institutions, and organizations from
and submitting loan applications to accessing U.S. financial systems or benefiting should be updated regularly
lenders. The software may notify you from services involving U.S. markets. to protect the dealership from
of an invalid driver’s license number criminal activity.
or wrong address; however, your team The process is essentially the same as with
should also look for behavioral Red Red Flags. If a name is flagged, your team Compliance processes aren’t designed to
Flags. Is the customer anxious, in a should verify the identity of the person in make life more difficult. They are meant
hurry, or trying to use large amounts front of them. to protect against fraud. By regularly
of cash? Paying attention to both updating your processes and reinforcing
behavior and the credit report will help For example, John Smith is one of the most them through training, your team will be
your team move on to the next ITPP common names in the U.S. Is the John better able to protect your dealership while
step. Smith in front of you the same as the one
2. Evaluate Red Flags. Not everyone on the list? Do they have a different middle effectively processing legitimate deals.
updates their driver’s license after name or suffix? Are they local, or did they These processes will become second
every move, or changes from a maiden just move to the area? Delving deeper nature, reducing business disruption while
name to a married name immediately. could clear a customer from the SDNL, or enhancing your dealership’s ability to detect
When those Red Flags appear, your validate that you have a specially designated fraud. n
team should try to clear them, asking individual in the dealership.
for further proof of identification, As executive vice president of dealer services
such as a phone or electricity bill, or a Let’s say you have a customer with several at EFG Companies, John Stephens directs the
marriage certificate. If a customer tries Red Flags whose name is flagged in the company’s direct sales and service channel,
to rush past these stipulations, there is SDNL. What do you do? providing EFG’s solutions and engagement
cause for concern.
3. Respond to Red Flags. If an F&I Upper management can help by contacting to auto dealers. John acts as an extension
of his clients’ management teams, and is
manager can’t clear Red Flags, the best the OFAC hotline, and may be asked if it’s responsible for leading EFG account service
action is to involve the F&I director or comfortable keeping the individual in the professionals in optimizing the profitability of
general manager. Upper management dealership until authorities arrive. If not, EFG’s direct dealer partners, and supporting
can notify the proper authorities, notifying the hotline and providing the the use of EFG products and services.
explain that the dealership simply individual’s current location fulfills the
cannot make the deal work, or politely dealership’s obligations.
ask the customer to leave.
4. Update the process. All compliance
processes should be regularly updated,
and Red Flags compliance is no
different. New ways to commit identity
fraud continually emerge. Dealers
must be prepared to identify, evaluate,
and respond to changes, and regularly
discuss fraud they have detected.

Office of Foreign Asset Control
The U.S. Patriot Act created the Office of
Foreign Asset Control (OFAC), which
gave OFAC jurisdiction over dealerships,
requiring them to check customers against
a Specially Designated Nationals (SDN) list.

Failing to comply with OFAC can result
in 30 years in prison, a $10 million fine
for corporations, and a $5 million fine for
individuals.

GIADA Independent Auto Dealer JANUARY 2018 | 33