Car dealerships have a target on their back when it comes to identity theft due to their access to sensitive consumer information. Dealership fraud prevention should not only entail efforts to stop cybercriminals, but also prevent their own employees from stealing this information.

Identity Theft at Car Dealerships

According to the Federal Trade Commission (FTC), the identities of an estimated nine million US citizens are stolen each year. Identity theft related to major purchases like buying a car is common, considering the necessary identifying, banking, and credit information involved.

Cybercriminals are constantly looking for ways to hack into information, or trick employees into doing it for them. At the same time, scammers may also try to purchase a vehicle in another person's name – something that the FTC's Red Flags Rule is designed to detect and prevent. But dealers also need to be aware that their own salespeople can be a source of fraud.

There are plenty of stories about rogue dealership salespeople and employees stealing consumers’ identifying information and committing fraud. Last year, a car salesman in Chesapeake, Virginia plead guilty to taking customer information and using it to open and access bank, credit, retail, and phone accounts.

Dealership Fraud Prevention and Customer Security Practices

One of the core principles of every dealership should be protecting the personal information of its customers. Recently, the CBT Automotive Network highlighted four simple measures dealers can take to prevent fraud and improve customer security:

  • Preventing Identity Theft at Your DealershipSecuring Where You Handle Information – The CBT Automotive Network points out that the dealer is always held liable in identity theft or fraud cases that occur through a vehicle sale. This means having rules about where you handle customer information and who's allowed around it. Access to the F&I office and deal jackets should be limited, and files shouldn't be allowed to leave the designated area.
  • Protecting How You Store Information – Safe handling and storage of customer data means keeping files under lock and key as well as encrypting computers and your store's network. This applies to well after any sale has taken place. The CBT Automotive Network calls locked filed cabinets and staff vigilance the best safety net for dealership fraud prevention.
  • What Dealers Do When Disposing of Information – Establishing a procedure for the disposal of information surrounding deals that fall through or are aged out is critical. Throwing things away doesn’t cut it. It's best to have a shredder for credit applications, credit reports, and other paperwork with sensitive information to stop dumpster diving as a means of dealership identity theft.
  • Don't Cut Corners with Who You Hire – Making careful decisions during the hiring process is always going to matter. Conducting background checks, calling references, and never cutting any corners is a must.

The Bottom Line

Establishing and following strict customer security practices at your dealership can stop your store from ever becoming a source of fraud. Identity theft at car dealerships is always going to be a hot topic, and it never hurts to be too careful.

Auto Credit Express has worked closely with dealerships across the nation for over 20 years, so we know that fraud is, unfortunately, an all too common occurrence. These tips can help you prevent fraud, just as we want to help your store. Call us at 888-535-2277 or fill out our contact form to learn more about our leads and products for auto dealers.