Fraudulent activity in used car dealerships has been a growing concern for many owners and their employees. According to the National Insurance Crime Bureau, auto fraud resulted in over $1 billion loss in 2019. It’s crucial to be aware of the warning signs and take proactive measures to prevent fraudulent activity from occurring in your dealership.
A prevalent type of fraud dealerships face is using fake identification documents. The automotive industry has seen a rise in the sophistication of fake IDs, making it increasingly difficult for employees to detect them. Automotive News reported that dealerships had lost millions of dollars in fraudulent deals due to counterfeit IDs.
To safeguard your dealership against fraudulent activity, there are steps you can take to mitigate this risk:
To automate your STIP (stipulations) verification, consider adding GPS technology to help you monitor a borrower’s location and ensure that they report to their place of employment as stated on their loan application. This can help lenders verify that a borrower is employed and earning the income they claimed, reducing the risk of fraud. It also confirms their permanent residence.
Following these tips can safeguard your dealership against fraudulent activity and avoid costly losses. In addition, keep in mind that fraud prevention is an ongoing process that requires vigilance and attention to detail. Stay informed of the latest trends and technologies in fraud prevention, and continuously train your employees to identify and prevent fraudulent activity. By doing so, you can help ensure the safety and success of your dealership.