Many fraudsters have an easier time bypassing online fraud prevention measures than in-person. The demand for purchasing things online has increased more and more each year, especially for automotive retail.
In fact, according to the Cox Automotive Future of Digital Retail study, 85% of shoppers are more likely to buy from a particular dealership that allows for them to start or complete nearly all of the vehicle purchase online.
As dealerships adjust to the demand in the market, they need to be aware of the two major forms of fraud: true name fraud and synthetic identity fraud.
These forms of fraud are becoming increasingly more common, making it no longer effective to simply check a credit score to verify identities. So while trying to keep up with demands it is important to stay educated on the risks.
Know Your Fraud
Being more knowledgeable about fraud can help prevent the action itself. Automotive dealerships are most vulnerable to true name fraud and synthetic identity fraud.
True Name Fraud happens when a scammer uses the victim's information to purchase items with larger values. These scammers never actually pay off what they borrow. When true name fraud occurs, it is likely that they opened an account with the victim's information but change the billing address so that it is more difficult to track, making it easier for them to successfully commit fraud.
Synthetic Identity Fraud occurs when scammers combine real information with fake information to create a different and unique identity that does not actually exist. For example, fraudsters will create an identity using name, social security number, date of birth, credit card information, and address from different sources or that are made up. Synthetic fraud can go unnoticed for a long time making it incredibly difficult to rectify.
In either case, once a fraudster has obtained the vehicle, it is unlikely it will ever be recovered. With these types of fraud being so common, it is essential to go above and beyond traditional methods of checking identities.
Go Above and Beyond Traditional Methods
Unfortunately, it is all too easy to get around traditional methods with stolen information from data breaches. Simply checking a credit score and scanning an ID is no longer an effective way to prevent fraud for your dealerships. Here are two simple methods dealerships can use to prevent fraud early:
Integrate OOW MultiFactor Efforts
Integrating OOW (Out of Wallet) multifactor efforts is a great step to prevent fraud. Out of Wallet questions are an extra security step that will help identify fraudsters and keep your information private.
These questions are personal questions that would make it hard for a fraudster to answer correctly. They are designed to make the identity verification process more efficient by giving instant results.
OOW questions can help trigger answers on an application that would deem an applicant high risk. They will also help prevent others from replicating your answers.
ID Authentication Solution
Another important way to increase your security to prevent fraud is to have an ID authentication step. ID authentication is one of the most effective ways of catching fraud before it is too late. ID authentications can usually give back a risk analysis within seconds of scanning an ID which will make sure that dealerships only move forward with customers that they can truly rely on.
Some ID authentication efforts, such as Intellicheck, have proven to be the top performing method of catching fraudsters before they are able to get a hold of the vehicle. Intellicheck's desktop and mobile app allows dealerships to scan IDs to confirm identities easily.
Stop Fraud In Its Tracks
Intellicheck is a great resource to prevent fraud at your dealership. We have solutions for both in-person and online transactions to defend against fraud and make the experience more comfortable for the dealership and the customer. Using Intellicheck will save you time and worry by reducing the risk of missed fraudsters. Not to mention, it is easy to use and easy to integrate into your system.