Fraud protection strategies for auto dealerships.

What we’ll cover:​

•   Common fraud tactics that target dealerships
•   Strategies to help you protect your business against fraud
•   Why fraud protection is essential for business success

Your customers trust you with their valuable private information: paystubs, personal identification, financial statements and more. You expect those documents you receive to be legitimate. But the reality is, fraud happens. Whether it’s false information shared online or forged documents provided in person, you should be on the lookout for scams.

A sound strategy for helping to protect your customers and your dealership against fraud is essential. Use these tips and tricks to help you prevent fraud at your dealership.

Common types of fraud

Be vigilant and on the look out for these common scams.

Synthetic identities

A fraudster may create a nonexistent identity when applying for car financing. It may contain elements of a real person’s identity, like their address or social security number.

Paystub fraud

Suspicious documentation and overstating income are fairly common. Some fraudsters will alter existing paychecks to meet income requirements.

Fake buyer/remote delivery scam

Delivering cars to non-existent buyers is a rising issue in the dealership space. If your dealership will be making a remote delivery, take precautions to avoid fraud and be prepared to act quickly if it happens:

•   Verify application information independently
•   Determine if you as the dealer, the transport company or a third party are liable
•   Ask the buyer to send a photo side-by-side with their driver’s license.
•   Deliver only to the consumer address on the application

By following protocols like these with remote delivery, you can help prevent fraudulent delivery scams.

Other ways to remain vigilant and help combat fraud

You can take steps to protect against each of these threats and more. Consider these strategies to help combat fraud.

Confirm all documentation

Whether it’s an ID, a paycheck or a bank statement, triple-check all documentation. To identify those who may be falsifying their identities, take a close look at IDs:

•   Look for the placement of information on a driver’s license to ensure it matches the state’s standard format.
•   Make sure the font matches the one typically used by the state.
•   Verify that all security features are in place for that state’s identification including holograms.
•   You can use the magnetic strip or QR code to verify the information contained on the strip matches the information on the front of the ID. Some tools may even link to public databases such as the DMV.

If a financial document, like a paystub, looks suspicious, call the employer to confirm or ask for additional information like a bank statement to verify.

Stay up to date on the latest trends

With fraud becoming a more common occurrence for dealerships, arming yourself with the latest information is key. One way you could do this is to stay in contact with industry peers, or even law enforcement, to ensure you’re aware of the latest best practices.

Practice proper cyber hygiene

With many of these fraud instances happening online, it’s also beneficial to ensure your team is adequately trained in cyber hygiene best practices. Encourage staff to utilize antivirus software, keep their devices secure, use unique passwords and never share passwords.

Ally fraud prevention support

To help dealers in the fight against fraud, Ally provides screening strategies and tools, and alternative data points to help verify a customer and routinely evaluates third-party tools to try to mitigate risk. Ally also offers Fraud & Security training provided by Ally Academy to help you equip your staff with the latest information and strategies to help be better protected against fraud.

Make fraud protection fundamental

Defending against security threats is paramount to the success of your business. Try these proactive strategies to help guard against fraud and protect your dealership and customers.