Page 42 - GIADA-Dec 2017-Final

TECHNOLOGY

To Catch a Thief

The magazine’s resident compliance pro says Red Flags tools aren’t

foolproof. He offers four tips for vetting suspicious buyers who seem to

have all the right answers.

By Gil Van Over

The recent rash of data breaches has common vehicle, didn’t blink at MSRP In response to the recent data breaches,
heightened the risk of personal identity pricing, and purchased every F&I product I expect there will be a drastic rise in the
theft throughout the country. In fact, three on the menu. number of Americans who place a freeze
dealerships with robust Red Flags programs on their credit bureau reports. As retailers
and processes in place recently experienced The dealer who successfully thwarted the who deal with credit reports in order
alarming incidents involving identity theft. theft was able to confirm the victim’s height to complete a high percentage of sales
and weight, which did not match the thief transactions, you need to know how to deal
Used in all three incidents was a synthetic in the showroom. A quick call to the local with credit freezes.
ID, which involves the creation of a new police department resulted in the arrest of
identity using a combination of real and that individual. Had this dealer relied solely A credit freeze literally means that once
fabricated information. Also common in on the cleared Red Flags report from the the consumer places a freeze on his or her
all three cases was a thief who successfully vendor and a glimpse at the driver’s license, credit report, potential viewers such as
answered out-of-wallet questions. The third he too would have suffered a loss. auto dealers and finance sources can only
dealer, however, acted on his gut feeling, access the information on the report after
probed further, and uncovered the deceit. That dealer shared a few other tips you can the consumer unlocks, or thaws, the report.
use to vet a suspicious customer:
"In response to the recent data breaches, The consumer must activate a credit
I expect there will be a drastic rise in the Tip No. 1: Check the email address provided freeze with each of the three major credit
number of Americans who place a freeze with the online credit app to see if it makes reporting agencies — Equifax, Experian,
on their credit bureau reports. As retailers sense for the applicant. “Carlygirl69@ and TransUnion. Part of the process of
who deal with credit reports in order gmail.com,” for instance, doesn’t seem to creating the credit freeze is a password or
to complete a high percentage of sales make sense for a 65-year-old male. key code to thaw the freeze. When you
transactions, you need to know how to deal encounter a credit freeze, do the following:
with credit freezes." Tip No. 2: Review the ID closely. On
the photocopy, if the font for name and Step 1: Inform the consumer of the credit
A Red Flags Rule process lends itself very address is clear and sharp but the physical freeze and the need for both you and the
nicely to the edealership concept. In fact, characteristics and photo are slightly fuzzy, finance source to view the report.
many dealers leverage the same vendor the ID may have been altered.
they use to pull credit reports to also run an Step 2: Inform the customer that he or she
algorithm to vet for potential identify theft Tip No. 3: Push the customer to reduce the must contact each credit reporting agency
red flags. Unfortunately, this electronic loan term from 72 months to 48 months, to request a thaw.
vetting may not always be good enough, as which will drastically raise the monthly
the dealer with that gut feeling proved. payment. If the person readily agrees, it’s Step 3: Recommend to the customer that
likely the individual has no intention of the thaw be set for at least a week once
Also unfortunate is that answers to the repaying the loan and is likely an ID thief. the personal password or key code is
out-of-wallet questions these vetting tools obtained. This will provide adequate time
generate can be found in the credit report. Tip No. 4: Ask additional out-of-wallet for potential finance sources to access and
If the thief had enough information to questions not generated by your vendor. view the report.
create a synthetic ID, it’s likely he or she has For example, ask suspicious customers
a copy of the credit report. what their astrological sign is (based on Once thawed, you can proceed with the
their birthdate), in what state they obtained deal. Good luck and good selling. n
There were other red flags the vendor’s their Social Security number (based on the
algorithm missed in those three incidents: Social Security numbering methodology), Gil Van Over is the executive director of
The thief wasn’t from the area, had never or to describe their home (based on a Automotive Compliance Education (ACE)
done business with the dealership before, Google Earth search). and founder and president of gvo3 &
was purchasing a high-end but rather Associates. Email him at gvo@bobit.com.

40 | GIADA Independent Auto Dealer DECEMBER 2017