Automotive News - October 16, 2017 - Supplement - S7

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potential buyer has created or purchased
fraudulent pay stubs, bank statements, driver's licenses or other documents used to verify income before a purchase and financing
are approved.
In these two cases, there is one first and
most important best practice: If something
doesn't look right, stop and take time to verify
the documents or information provided.
Reach out for a second opinion. If necessary,
consult websites that can provide income
verification for a fee.
Hennessey says if a bank asks for proof of
income from a potential buyer, examine the
document before sending it because the
bank may rely on that information. "A dealership is a fast-paced environment and
sometimes employees are tempted to just
go through the motions instead of stopping
for a second and doing a gut check," she
says. "If something seems off or not right,
say something."

"If you sense
something is off
- something in the
credit file or
something in the
documents from the
bank looks wrong
- slow down."

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OCTOBER 16, 2017 | 7

Trickier situation
The third way fraudsters attempt to cheat
dealerships is through title fraud. A potential
customer arrives at the dealership with one
or more vehicles to sell, often with a forged
title, sometimes from out of state. "At the
dealership, employees usually are very comfortable with what a vehicle title from their
own state looks like. But they may have never
seen a title from another state," Hennessey
says.
Going online to look at sample titles for the
state in question - to make sure the title
looks correct - or calling the secretary of
state's office or department of motor vehicles
to verify that an out-of-state title is legitimate
might help.
For both an in-state and out-of-state title,
other potential red flags are a title that does
not list any lien or financing, or a purchaser
trying to sell multiple vehicles at once. Again,
if anything looks unusual or amiss, following
best practices means taking the time to verify
any and all titles before making a deal and
writing a check.
The fourth type of fraudulent transaction is
a straw purchase: when a customer is purchasing a vehicle on behalf of another individual, but has no intent to be bound by the
contract.
It's a trickier situation to figure out; sometimes a friend or family member is legitimately helping the customer buy a car, or
possibly co-signing a loan. But other times
the purchaser is merely using the friend's
name to obtain credit - with the friend having no intention to help pay for the vehicle -
or is using someone's name without that person's knowledge. For instance, the customer

may say he's purchasing the vehicle for a
grandparent who can't come into the dealership, but the elderly person has no idea
what's happening.
In these cases, Hennessey says, "Make sure
a finance manager explains the situation to
the underwriter. Sometimes customers are
upfront about what's happening, sometimes
not. Make sure to ask who is going to be using
the vehicle. Look to see if a trade-in or insurance is in someone else's name; if the vehicle
is being financed, the financial institution requires that auto insurance is in the name of
the purchaser."

Check the basics
In all these cases, best practices for dealing with the situation begin with careful
verification of all information and documents, while also being respectful of the
customer.
"Nobody wants to have theft happen. If
you sense something is off - something in
the credit file or something in the documents from the bank looks wrong - slow
down."
She says to take a careful and educated

look at all paperwork connected with a potential transaction. "Look at some basic
things," she says. "Do the decimals line up
properly on the pay stub? Are the payroll taxes calculated correctly? Is the driver's license
a real license or just a paper copy?" Any small
problems may be the sign of a fraudulent
document.
Taking the time to verify information can
seem a tall order, especially for dealerships
trying to meet the expectations of today's
busy shoppers.
"It's more challenging today, given the increased pressure to complete transactions as
quickly and efficiently as possible," Hennessey says. "But dealerships can explore opportunities to create a customer experience
that meets shopper expectations. For instance, if you allow potential buyers to do
some of their paperwork online, when they
come into the dealership, a finance manager
can be prepared to look at everything right
away."
But in today's environment, she says, "If
something feels funky, it's always better to be
cautious, even if it takes another five to 10
minutes, or a two-minute phone call."

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