For dealerships, fighting fraud is a never-ending battle. Software can aid in the process — but only so far. A tool forged from a partnership between Credit Bureau Connection and Experian claims to stop fraud before it happens, while preserving the evidence in case a bad deal clears the finance office.
If a vehicle is sold to a fraudster, executives at both companies say, general managers and dealer principals can use the tool to figure out how it happened and who was responsible.
The tool, called eCredit Complete, utilizes credit bureau data to flag inconsistencies in the credit application process. Launched this January, the system documents each transaction and the corresponding actions taken by the F&I manager. It also sends the paperwork to a designated dealership employee, typically the chief compliance officer, to sign off on before deals go through. Executives at Credit Bureau Connection say the features stop fraudulent deals from going through and can potentially weed out rogue employees.
Typically, fraud-prevention systems generate a score of certainty that the identity matches the customer. For Mike Green, CEO of Credit Bureau Connection, that score doesn’t tell the whole story.
“If you were sitting in front of a consumer running a credit report trying to make a credit decision, and you were returned a fraud score of 92 or 87, in today’s world, what does that mean?” Green said.
Exactly what’s wrong
In contrast, eCredit Complete indicates exactly what elements of the customer’s identity require additional documents to validate. Darin Larsen, Credit Bureau Connection’s COO, says this tells F&I managers exactly what’s wrong and how to fix it. If F&I managers don’t follow up with the requested materials, the system will make note of that missed step.
The tool is aimed particularly at preventing synthetic-identity fraud. That’s where scammers assemble an online persona that includes pieces of a genuine consumer’s identity, such as a Social Security number, along with bogus information. The goal is to establish a credit history that looks healthy enough to secure an auto loan.
Due to the data provided by Experian, synthetic-identity fraud alerts are few and far between, Larsen said, with false positives being extremely rare.
“If a dealer is getting a tremendous amount of false positives on a high number of deals, it’s human nature to disregard that,” Larsen said. “The last thing we want to do is stop good business from happening.”
Experian, of Dublin, Ireland, is a multinational consumer credit reporting company with North American headquarters in Costa Mesa, Calif. Credit Bureau Connection, of Fresno, Calif., offers credit reporting and compliance solutions.
Call the cops
The system adds another layer of protection by incorporating another dealership employee into the process. Because eCredit Complete sends a copy of the deal to dealership compliance officers to review, they have the opportunity to stop a potentially fraudulent deal.
Two California dealerships prevented fraud losses while using the tool, according to Experian. In one case, a dealership was able to apprehend a fraudster after the system alerted employees of potential synthetic identity when pulling the customer’s credit report. When the customer returned to the store to pick up the vehicle, police were waiting.
Credit Bureau Connection said the tool is used by “thousands of dealership customers” nationwide.
By Jackie Charniga Automotive News
November 27, 2019, 11:03 AM