Category: Compliance

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Fraud identity tool enforces in-store compliance processesFraud identity tool enforces in-store compliance processes

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


Credit detection tool thwarts synthetic identity fraudCredit detection tool thwarts synthetic identity fraud

October 28, 2019

Bianca Chan, Associate Editor
Exclusive, Risk Management

A new tool targeting synthetic fraud, developed by Experian and Credit Bureau Connection (CBC), has already thwarted three instances of fraud at the dealership, said Chris Ryan, Experian’s senior fraud solutions consultant.

The tool, called Synthetic Identity Detection Score, launched in March and is the latest fraud solution to come out of Experian and CBC’s collaboration. CBC has been incorporating Experian’s fraud tools into its fraud-detection toolkit since 2015.

“The challenge with synthetic identity fraud is that these fake identities appear to be legitimate,” Ryan explained. “These fraudsters cultivate positive credit behavior in order to access larger and larger amounts of credit and maximize what they can steal.” As a result, Synthetic ID Score was developed to examine the way a credit identity or profile evolves. It understands when and how an identity is made to appear more creditworthy, such as sharing accounts between people, Ryan said.

Already, the tool has bolstered dealers’ defenses against fraud, specifically during the account-opening process, said CBC Chief Executive Mike Green.

Recently, an individual attempted to purchase a luxury vehicle, worth $90,000,  from a dealership in southern California, Green explained. The detection tool cross-referenced the information provided and flagged the transaction as potentially fraudulent. “We later found that the individual used the information of another individual with the same name,” he said. “After further investigation by the authorities, it was determined this was the work of a fraud ring that had already defrauded other dealerships.”

In another instance, sales managers pulled an applicant’s credit report, resulting in a potentially synthetic identity fraud flag. When the dealership requested additional verification materials from the applicant, the customer left the dealership. The sales team called the applicant to come back and pick up the vehicle – once the individual arrived, the dealership called the police and the fraudster was apprehended.

Experian estimates that the number of identities the technology flags as suspicious has increased more than 5% year over year.

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Americans with Disabilities Act (ADA) ComplianceAmericans with Disabilities Act (ADA) Compliance

If you use one of Credit Bureau Connections online web applications you may have noticed the wheelchair icon at the bottom right of the application. CBC recently implemented Americans with Disabilities Act (ADA) Compliance on all online web apps.

Wheelchair icon

The Americans with Disabilities Act (ADA) was developed in 1990 and is meant to ensure that people with disabilities have the same opportunities as anyone else. This means any businesses that serve the public must make sure their building accommodates people with disabilities of various kinds. And now that the internet is so widely used, ADA compliance also applies to websites and even mobile apps. Basically, this means that your website needs to be accessible to people who have disabilities that affect their hearing, vision, or physical capacities.

Recently, a ruling has been passed declaring the official standard of website accessibility for businesses. Title III of the ADA has mandated that all “places of public accommodation” are required by law to remove any “access barriers” that would inhibit a person with disabilities from accessing the business’ goods or services.

The ADA accessibility provided by CBC only works within the iFramed web application. You are still responsible for making the rest of your website ADA compliant. Feel free to contact CBC with any questions regarding ADA compliance.

ID Thief

Fraud Ring Thwarted by CBC Fraud Protection ToolsFraud Ring Thwarted by CBC Fraud Protection Tools

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FRESNO, CA – Credit Bureau Connection (CBC), the provider of the most comprehensive set of fraud prevention tools in the automotive industry, helped stop a Southern California fraud ring.

Automotive fraud comes in many different flavors, from personal identity theft to thieves creating a new persona using synthetic identities, and more. CBC proudly stands at the forefront of dealership Red Flags detection and various other identity protection tools with detection built into CBC’s proprietary Red Flags Compliance. CBC makes it simple to detect potential fraud by delivering fraud and OFAC results at the top of the dealer run credit report. This makes the daunting task of dealership due diligence easier than any other solution available.

The power of CBC’s software was proven recently when an individual attempted to purchase a luxury vehicle from a well known Southern California dealership, and during the process, CBC’s solution alerted dealership personnel of a potential threat. The information delivered was shared with local authorities, and the thief was arrested. This eventually led to the arrest of another individual linked to the same theft ring.

Testimonial from Chris Cleveland, Compliance Director, Legal Affairs Dept. Galpin Motors, Inc.

Credit Bureau Connection’s (CBC) new fraud prevention product allows our dealership to better identify synthetic identity theft, which seems to be occurring at a higher rate than ever before. Using this new tool, one of our Galpin Motors Sales Managers was able to quickly stop the deal in its tracks and notify the compliance department of the alert. After investigating the incident and referring it to the police, it turned out that the individual was using the identity of a person who happened to share the same name. While we were able to prevent the thief from obtaining a brand new luxury vehicle, he had already obtained other luxury vehicles from local dealerships (who I suspect were not using CBC). Fortunately, the information we provided to the police eventually led to the arrest of two individuals involved in scamming the other dealers. I would like to thank CBC for being on the cutting edge of fraud prevention and Red Flag compliance, which is why we chose CBC in the first place.

Winding Road

Sales Compliance and the Red Flags Rut – by Gil Van OverSales Compliance and the Red Flags Rut – by Gil Van Over

The latest statistics from the Federales suggest that at least one-quarter of Americans have been a victim of identity theft. That percentage would likely be higher if more victims were aware of it.

Under the Federal Trade Commission’s Red Flags Rule, dealerships are obligated to have a program in place to help diminish the likelihood that an identity thief can use a victim’s information to purchase or lease a vehicle.

We all get into ruts. One of the most frequent I see in sales managers is the Red Flags rut. It’s also among the most perilous.

Red Flags War Story

An attorney once called to ask me to represent a dealer who was being sued by a victim of identity theft. As you know, I always work for the good guys, never the Dark Side.

The fact pattern was that an identity thief drove over four hours on back roads to the dealership, intending to purchase a vehicle using a victim’s identity. The dealer’s vendor identified at least nine potential Red Flags, which the dealer ignored. Unfortunately, the dealer’s finance source also ignored them and financed the contract.

Three months later, the victim became aware his identity had been stolen and filed the requisite police report. The finance source successfully repossessed the vehicle (a rarity), and recoursed the paper back to the dealer at a loss.

Fast-forward another three months. The identity thief is now in the recycling-the-victim’s-identity rut. He makes the same drive to the same dealership (asking for the same salesperson) to purchase and finance another vehicle using the victim’s identity. This time the dealer’s vendor identified 13 potential issues and even issued an alert.

The dealer spot-delivered the vehicle and financed it with a different source who also ignored the glaring red flags. Of course, three months later, the victim found out, filed another police report, then sued the dealer for six figures.

The lawsuit could have been avoided had the dealer followed just a very basic Red Flags process or paid attention to the many warnings.

Your Red Flags Process

Common discrepancies identified by Red Flags vendors include address, Social Security number, a consumer-initiated credit bureau alert, a security freeze, or the vendor’s inability to satisfactorily confirm the consumer’s identity against their 500 or so databases.

To properly clear the address discrepancy, the manager should obtain valid proof of residence from the customer. Acceptable proof of roof does not include license, registration, or insurance card. These are among the first documents an identity thief forges.

The same process applies for Socials. Obtain a copy of the Social Security card or a letter from the Social Security Administration. Watch out for forgeries! A quick internet search will provide examples of legitimate cards to compare with the issue date. They change and morph over time.

And no, successfully answering out-of-wallet questions clears neither the address nor the Social Security discrepancy. Out-of-wallet questions can clear other potential Red Flags, including an unconfirmed last name or a bureau fraud alert.

The ‘Manage the Report’ Rut

Most of the vendors have a mechanism to document that the Red Flag was cleared and retain that documentation in its archives. Unfortunately, it can be as simple as the manager clicking on a button in the software.

The correct approach to documenting that the dealership conducted its due diligence and properly vetted the transaction is to treat a Red Flags like you treat a subprime stip.

Many dealers use a structured approach to clearing and submitting subprime stips, and with good reason. If a deal defaults, it can become subject to recourse from some subprime finance sources because the stips were falsified or bogus. If you do not obtain, vet, copy, and submit the stips, you do not have the documentation to fight the claim.

Same goes for documenting the clearance of potential Red Flags: Obtain the clearing documentation, vet it for legitimacy and authenticity, copy it for your file, and then document the clearing action in your Red Flags vendor’s system.

You now have proof that, to the best of your knowledge, you properly cleared the Red Flags and can proceed with the sale.

And yes, good luck and good selling!


Gil Van Over
Gil Van Over


Gil Van Over is the executive director of Automotive Compliance Education (ACE), the founder and president of gvo3 & Associates, and author of “Automotive Compliance in a Digital World.” Email him at View Bio

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What is the difference between VantageScore® and FICO®?What is the difference between VantageScore® and FICO®?

In a Nutshell

VantageScore Solutions and FICO create credit-scoring models that use consumer credit data to generate credit scores — a three-digit number that predicts a consumer’s ability to repay a debt. But they use different methods to calculate scores, which may result in slight scoring differences.

Written by:  Jennifer Brozic 

Here’s what you should know about the VantageScore® and FICO® credit-scoring models

The Fair Isaac Corporation introduced the first FICO® scoring model to lenders in 1989. According to the company, FICO® scores are used today by 90% of top lenders to make lending decisions. The VantageScore model wasn’t introduced until 2006. It was developed by the three major consumer credit bureaus — Equifax, Experian and TransUnion — to create a “more predictive scoring model that is easy to understand and apply.”

Although both models are designed to predict a consumer’s ability to repay a debt, they do not treat all credit data equally. Let’s explore some of the differences between the two models and why they may matter to you.

VantageScore and FICO criteria

 VantageScore® and FICO® credit-scoring models use data obtained from consumer credit reports to generate credit scores. But the data may affect scores differently depending on which model is being used. Let’s look at the key factors that these models use to calculate your scores.

VantageScore groups credit information into six main categories, but the categories don’t have the same influence on your scores.

  • Payment history: extremely influential
  • Age and type of credit: highly influential
  • Percentage of credit limit used: highly influential
  • Total balances and debt: moderately influential
  • Recent credit behavior and inquiries: less influential
  • Available credit: less influential

FICO groups the information into five categories, with each one representing a percentage of your score.

  • Payment history: 35%
  • Amounts owed: 30%
  • Length of credit history: 15%
  • New credit: 10%
  • Credit mix: 10%

But again, keep in mind that the exact impact a specific category will have on your credit scores can vary depending on your individual credit history and the specific credit-scoring model used.

Four ways VantageScore® and FICO® credit scores are different

Now that you know the general criteria used to generate credit scores, let’s look at how VantageScore and FICO use the data and the effect certain elements can have on your scores.

Length of credit history required

To have FICO® scores, consumers need to have one or more accounts that have been open for at least six months and at least one account that has reported to the credit bureaus within the past six months (plus no indication on your credit reports of being deceased). Otherwise, FICO won’t generate your scores.

On the other hand, the VantageScore® model may be able to score consumers who are new to credit or use credit infrequently. VantageScore can use data of just one month’s history and one account reported within the previous 24 months.

So if you’re new to credit or you haven’t used credit in a while, you may not have FICO® credit scores, but you might have VantageScore® credit scores.

Tax liens and civil judgments

In July 2017, changes to public-record reporting requirements were implemented that affected the information sent to consumer credit bureaus, leading them to eliminate many tax liens and civil judgments from consumers’ credit reports. In response to the changes, tax liens aren’t weighed as heavily (but can still have a significant impact) in the latest VantageScore version, VantageScore® 4.0. And they can still have a significant impact on FICO® scoring models.

Credit inquiries

It’s a Catch-22. Applying for new lines of credit — such as student loans, credit cards or mortgages — can negatively affect your credit scores. But applying for multiple lines in order to compare rates makes sense if you want to get the best deal. To minimize the impact that shopping for credit can have on your scores, newer FICO® versions count multiple credit inquiries of the same type within a 45-day period as a single inquiry. This can be especially helpful when you’re shopping around for a major loan, like for a car, as multiple auto loan inquiries within that window should only count as one hard inquiry. For some older FICO® versions, the single-inquiry period can be 14 days.

Common Question

What’s a credit inquiry?

An inquiry is a request for your credit file. There are two types: hard and soft. Hard inquiries occur when lenders look at your file after you apply for credit. In general, these will affect your credit scores. Soft inquiries are reviews of your file that don’t affect your credit scores. Examples of soft inquiries include requesting your own credit reports or lenders looking at them to qualify you for a prescreening offer.

VantageScore counts multiple inquiries, even for different types of loans, within a 14-day period as a single inquiry. Multiple inquiries on your reports for the same type of loan or credit, spanning more than a 14-day period, may have a greater impact to your VantageScore® credit scores than to your FICO® scores.

Take note though that according to the Consumer Financial Protection Bureau, mortgage loan inquiries within a 45-day window are recorded as a single hard inquiry.

Trending data

Credit scores represent a snapshot of an individual’s credit profile at the specific point in time when the scores are generated. The FICO® credit-scoring models, for example, use data about consumers’ borrowing and credit utilization that’s been reported to the credit bureaus at the time the scores are generated.

VantageScore® 4.0, on the other hand, incorporates data that reflects patterns of behavior over time. The latest scores may include up to two years’ worth of consumer spending and credit utilization data in its calculation.

If you’re starting to tie yourself in a knot over all this information, take a deep breath.

According to Ash Exantus, director of financial education at BankMobile, you should be on the right track as long as you’re managing your credit according to the general categories that VantageScore and FICO prioritize.

“It’s more important to focus on the similarities,” says Exantus, “than the differences.”

VantageScore and FICO ranges

Both credit-scoring models have evolved over the years, resulting in multiple versions of each. FICO generates two types of scores — base and industry-specific scores.

FICO® base scores help predict a consumer’s ability to repay a debt based on their overall credit profile, and they range from 300 to 850. Industry-specific scores help predict a consumer’s ability to repay a specific type of debt, such as an auto loan or mortgage, and they range from 250 to 900.

Unlike FICO, the VantageScore® model doesn’t generate industry-specific scores. It only calculates base scores. When it was first introduced in 2006, the scoring model had a range of 501 to 990. That changed when VantageScore® 3.0 was released, with a range of 300 to 850. And it continues today with VantageScore® 4.0, making it easier for consumers to compare their VantageScore® and FICO® credit scores.

How can I get my VantageScore® and FICO® credit scores?

You can get your credit scores from a variety of sources, including lenders, credit bureaus, nonprofit credit counselors and personal finance websites like Credit Karma. But watch out — some providers charge a fee for access to your scores, whereas others offer them for free.

Common Question

Are my scores the same at all three bureaus?

No! Lenders don’t always report to the three major consumer credit-reporting agencies: Equifax, Experian and TransUnion. And they provide information to different bureaus at different times. So it’s not unusual for your scores to vary slightly between agencies.

It’s also a good idea to find out which scores you’re getting. Some sources provide actual VantageScore® or FICO® credit scores, while others use scores that are meant for educational purposes only and aren’t what lenders might use. Educational scores can be similar to your VantageScore® and FICO® credit scores, but not always.

Credit Karma provides VantageScore® 3.0 credit scores from TransUnion and Equifax, while some credit card issuers or banks may offer access to your FICO® scores from specific bureaus. So be sure to check which scoring model is being used and which credit reports your scores are based on.

Bottom line

Because credit scores are such a critical factor in a consumer’s ability to borrow money, it’s easy to get caught up in the numbers. But with so many scores available for lenders to use, it’s probably best to monitor how your scores change overall as you use credit responsibly, rather than focusing on specific numbers.

If you consistently pay your bills on time, reduce your debt and apply only for credit you need, over time you can establish a solid credit history.

Parking Lot

Dealer Fines and How to Avoid ThemDealer Fines and How to Avoid Them

Source: Dealer Fines and How to Avoid Them

There are times when I overhear industry conference participants moan about a presentation they just attended. “All gloom, doom, and scare tactics, but no solutions.” Sometimes that speaker was me.

Because of that, I made a New Year’s resolution to be certain I offer solutions when I point out a potential risk and liability. With that said, below are some of the federal regulations dealers are required to comply with and the potential fines and jail time associated with each regulation. Sticking with my New Year’s resolution, I’ve also include best practices solutions to hopefully avoid those penalties.

• Office of Foreign Assets Control (OFAC): This is the grand poobah of all potential fines. The OFAC is the agency within the U.S. Treasury that compiles a list of Specially Designated Nationals (SDN). All U.S. citizens are required to check the OFAC list of these suspected despots prior to entering into a business arrangement.

Depending on the program, criminal penalties can include fines ranging from $50,000 to $10 million and imprisonment ranging from 10 to 30 years for willful violations. Civil penalties range from $250,000 or twice the amount of each underlying transaction to $1.075 million for each violation, according to the Treasury.

Solution: Arrange with your credit bureau provider to automatically check OFAC with each credit report. Train your sales and F&I managers to confirm the OFAC check is clean or to clear any potential hit. Also establish a process to check OFAC on any third-party contributions to a contract, whether it is the trade or down payment gifts.

• Used Car Rule: This rule has been around since 1967, yet many still struggle with the proper disclosures — even with the recently revised Used Car Buyer’s Guide. This struggle is not necessarily from a willful desire to defraud a consumer, but rather a view that this is just one more piece of paper to complete the deal jacket. Dealers who violate the rule may be subject to penalties of up to $40,654 per violation.

Solution: If a vendor is responsible for posting the guides, check the guides for correctness. Whether posted by a vendor or a lot porter, conduct regular lot walks to ensure a guide is prominently displayed on each used vehicle and demonstrator available for sale.

• Red Flags Rule: The latest attempt at deputizing car dealers in the fight against identity theft has been the law for a few years now. The Federal Trade Commission (FTC) can seek both monetary civil penalties and injunctive relief for violations. Currently, the law sets $3,500 as the maximum civil penalty per violation. And each instance in which a company has violated the rule is considered a separate ­violation.

Solution: Contract with your credit bureau provider’s automated Red Flags solution. These offerings will alert the sales and F&I managers to any potential red flags of identity theft. Develop and implement a robust identity theft prevention program as required by law. Train every manager on the proper clearing actions of any identified red flags.

• Internal Revenue Service (IRS): Ah, the venerable IRS. It has been rumored to be out actively auditing businesses for compliance with the FinCEN 8300 report.

Dealers may be subject to penalties if they fail to file a correct and complete Form 8300 on time and cannot show that the failure was due to reasonable cause, according to the IRS. They may also be subject to penalties if they fail to furnish a correct and complete statement to each person named in a required report in a timely manner.

“A minimum penalty of $25,000 may be imposed if the failure is due to an intentional or willful disregard of the cash reporting requirements,” the IRS notes.

Solution: Train all managers on the various requirements under the 8300 reporting rule. Some dealers have purchased software designed to sort through transactions in the DMS to identify any potential filing requirement.

The lesson here is it truly is all about the processes. Dealers must have written policies in place that lay out the steps for handling each compliance procedure. They must also periodically train all employees in the approved process. Finally, you must have checks and balances in place to be sure your employees are properly following the approved policies. These checks and balances include checklists and a monthly audit of a sample of deals.

Without these processes in place, a dealer really is taking a huge chance with complying with these regulations.

Good luck and good selling!

Gil Van Over is the executive director of Automotive Compliance Education (ACE) and the founder and president of gvo3 & Associates. Email him at

Credit Bureau Connection (CBC) and Fraud Protection Network (FPN) Join Together to Provide Identity Theft Protection for EveryoneCredit Bureau Connection (CBC) and Fraud Protection Network (FPN) Join Together to Provide Identity Theft Protection for Everyone

Doesn’t it make sense to offer your customers whom you have captured sensitive personal data, a way to protect them from future identity theft?

So do we!

While others are finding ways to take advantage of an already bad situation, CBC has teamed up with Fraud Protection Network to provide affordable identity theft protection you can trust.

In uncertain times, it never fails, the scam artists come out, and this situation is no exception. Since the recent data breach announced early in September, evil doers are praying on under-informed consumers by tricking them into purchasing expensive, binding, and inadequate identity protection programs.

By entering the promo code “cbc” at checkout, you will receive a discounted rate on the program you select. RapID Pro or RapID Pro Plus will help protect you and your customers from fraud. From real-time credit monitoring to providing credit reports with a credit score, RapID Pro or RapID Pro Plus delivers peace of mind, personal protection, and a whole lot more.

Visit Fraud Protection Network and find out how you can provide proven and honest protection for your dealership personnel and customers.

CBC eVaultCBC eVault

  Long Term Record Retention

 In order for today’s automotive dealers to stay in compliance with all of the recent industry-specific regulations, they need to make sure that their document management strategies are in order. Credit Bureau Connection’s eVault long-term record retention provides the necessary tool to not only be in compliance, but to remain in compliance for the long haul; removing the need to print out duplicate or triplicate forms. Credit Bureau Connection’s eCredit Complete incorporates long-term record retention as a part of its all-inclusive compliance suite.Your credit reports and all credit related documents generated in eCredit Complete are retained in the secure electronic eVault for later retrieval in the event of a dispute or compliance audit. No more searching through traditional deal jackets, filing cabinets, or off-site storage for your consumer credit applications and compliance documentation. In addition, the eVault is designed to store scanned or uploaded miscellaneous deal documents i.e. driver’s license, utility bill, pay stub, etc. for storage in the eVault.

Features and Benefits
  • Long-term electronic data storage of all eCredit Complete produced compliance documents and credit reports
  • Stored documents are accessible to authorized users whenever needed without request, email, or contact with Credit Bureau Connection
  • The eVault comes standard with Credit Bureau Connection’s all inclusive compliance tools
  • Designed to eliminate the need for off-site storage of credit, compliance, and various deal documents