Automotive News - September 25, 2017 - Supplement - S10

Something smells phishy
STEERING CLEAR OF FRAUD

.............................

"

Dealerships are
at risk from a
variety of fraud
tactics. But
because of the
nature of their
business, auto
dealerships are
most at risk
from fraud
attempts in
the treasurer's
office.

"

.............................

10

P

icture this scenario: While your dealership's owner is on vacation, the assistant
treasurer receives an urgent email. It looks as if it's from the dealer/principal; the
message uses his name and what appears to be his email address. It contains details
that make it sound authentic: It refers to his vacation plans and addresses the employee
by name.
The message: "I need your help. I need you to wire $200,000 into this account right
now. I'm sorry I'm not there to take care of this myself, but I know I can trust you to handle this for me. Please keep this between you and me for now. I'll explain when I'm back in
the office on Tuesday."
The message looks legitimate. And of course the employee wants to help - it's the
boss! Before consulting with anyone else, the assistant treasurer wires the money to the
account listed in the message.
And just like that, the money is gone. The dealership has just become the victim of an
email spoofing fraud.
Like any other business, dealerships are at risk from a variety of fraud tactics. But
because of the nature of their business, auto dealerships are prime targets for fraud
attempts in the treasurer's office, says Harry Curtis, Treasury Sales Executive for Dealer
Financial Services at Bank of America Merrill Lynch.
"Dealerships are vulnerable and o en targeted because, despite relatively high dollar
sales, many dealerships operate like small businesses," says Curtis. "Dealerships move a
lot of money with relatively few transactions. But because a lot of dealerships feel like a
family business, o en they don't necessarily have the controls of a larger company.
"They have, as you might expect, a lot of trust in their employees. And they also don't
necessarily have the controls of authentication that a big corporation might have."
Although fraud threats are the same regardless of industry, Curtis says, "What's unique
to dealerships is that family-business feel and also the titled nature of the vehicles -
which leads dealerships to use the wire system more for payments.
"Dealerships also can be vulnerable because there's a lot of money moving in and out.
A lot of money can build up on the weekend; if you sell five Mercedes on a weekend, you
might have $500,000 in the system."
Fraud attempts aimed at dealerships usually take three common forms: payment fraud
via email spoofing, forged treasurer's checks and fraud resulting from the use of the automated-clearing-house system.
Because you can't transfer the ownership of a vehicle without a title, most vehicle transactions are conducted using either a wire payment or treasurer's check - both regular
targets for fraudsters.
Curtis says business email compromise is the most common fraud tactic in the industry
today. The criminals typically use bogus email messages - such as the one at the start
of this story - to persuade an employee to wire money to a fraudster's bank account.
But in the past year, Bank of America also has seen several instances of dealerships



Table of Contents for the Digital Edition of Automotive News - September 25, 2017 - Supplement

Contents
Automotive News - September 25, 2017 - Supplement - Intro
Automotive News - September 25, 2017 - Supplement - S1
Automotive News - September 25, 2017 - Supplement - Contents
Automotive News - September 25, 2017 - Supplement - S3
Automotive News - September 25, 2017 - Supplement - S4
Automotive News - September 25, 2017 - Supplement - S5
Automotive News - September 25, 2017 - Supplement - S6
Automotive News - September 25, 2017 - Supplement - S7
Automotive News - September 25, 2017 - Supplement - S8
Automotive News - September 25, 2017 - Supplement - S9
Automotive News - September 25, 2017 - Supplement - S10
Automotive News - September 25, 2017 - Supplement - S11
Automotive News - September 25, 2017 - Supplement - S12
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