A Wake-up Call on ID Fraud Leads to More Sales

Benny Boyd Auto Group lost four vehicles to ID fraud. But by adopting a tiny, powerful ID scanner, and a new ‘MUST SCAN-IT PROCESS”, he not only shut down fake-ID scams, he increased sales 10% storewide.

Have you ever had a vehicle bought (and hence, stolen) with a fraudulent ID? Lost a vehicle to a fake-ID-toting test driver? No?  Then you’re lucky… but it’s probably just a matter of time before it happens.

At Benny Body Auto Group, we had a major wake-up call when four vehicles were stolen in one month! Because our stores are mostly in rural areas, we do about 30 long-distance car sales a month. About 18 months ago we sold four vehicles (three in Texas, one in California) to buyers whose driver’s licenses and credit info “checked out” perfectly. The bank agreed, funded the loans and signed the contracts. The vehicles were then shipped to the “buyer’s” given address, where the thieves cleverly intercepted the truck-driver, smilingly signed for delivery, and promptly drove off into the night! In fact, the thief-recipient of the car in California, knowing he had to meet the truck driver/vehicle right in front of the victimized family’s house, arranged for the car to arrive at 2 AM: arguing he owned a pizza restaurant that closed late and didn’t want his wife to be woken up by the transaction!

ID fraud is a national and dealership crisis: according to the FBI, identity theft has overtaken the drug trade as the most costly U.S. crime. In fact, more than 267 million consumer records get exposed – and 60 million pieces of personal ID wind up in the hands of identity thieves – each year. And from what I hear, more and more dealerships are reporting that fraudsters are presenting impeccable-looking (fake) IDs, and then driving off on test-drives or purchasing vehicles with them.

Why? Most dealership processes are way behind ID thieves’ super-sophisticated technology.  Every dealer knows the ID-verification headaches we have lived with for decades: the endless ID photocopying and verification calling – and all those barcode scanners, which are next to useless because they can only verify that data is present on a card, not that it’s valid. And while those time-consuming calls to the DMV, etc. to verify identities can be effective, most cars are bought on weekends when these organizations are closed.

And even if all the old processes successfully raise flags in an F& I department – what about the test-drive? Think of the chaotic weekends: dozens of cars out on test-drives, photocopied IDs all over the place…It’s a recipe for disaster.

And, ID fraud is becoming an increasingly expensive dealer problem. Lender contracts often include verbiage stating the dealer is responsible for establishing the buyer’s identity and that they’re responsible for damages when a car is stolen/bought fraudulently. And, of course, the government requires us to take steps to flag identity fraud (the Safeguard and Red Flags Rules) – or face steep fines.  The cost to a dealership of a single car obtained with false IDs/documents can run north of $100,000!!!

So, what to do? The answer is astonishingly simple: get a state-of-the-art ID scanner. And then use it to institute a whole new process for your dealership, which can deliver eye-opening benefits that go WAY beyond stamping out fake ID scams.

A Good Scanner and a “MUST SCAN IT PROCESS”: From Expected to Surprising Results

  1. Get a Great Scanner. Like many of you, we have used scanners before: about 30 old ones are gathering dust in a closet, because they quickly broke or were too complex for the team to set up/use. This time we chose a new scanner that incorporates the same ID verification technology used by the Department of Homeland Security (DHS), Department of State and global border patrols. It was easy to set up, and when we insert any ID it takes only five seconds to know if there are any problems. We have been using it non-stop in our dealerships for over a year and there has not been a single technical issue.
  2. A“MUST SCAN-IT PROCESS” Because this scanner works and protects us flawlessly, it’s allowed us to put in place a, new strict ID-scanning process that begins at first point of contact, the reception desk. Now, no salesperson can get the keys to take a car out or work any deals unless that customer’s ID has been scanned. Management has to mandate this process change: no ID scan, no test-drive, no working car deals.
  3. Connect scans to your CRM. The receptionist can enter the vehicle stock number and the salesperson connected to the customer at the point-of-scan, so you always know where each car is and with whom. And, critically, this scanner automatically imports that customer’s data right into the DMS, so their pre-existing relationship with the dealership, and any lead or credit apps they’ve ever submitted, are immediately available to sales and F&I.
  4. Speed up the Process. With the customer info connected to sales and financing pre-test-drive, you can have the foursquare invoice/paperwork ready before that test-driver pulls back in. The only thing that needs filling out is the Social Security number.
  5. Track Sales and Marketing. As part of the ‘MUST SCAN-IT PROCESS’ make sure that each customer is asked where he/she heard about your dealership when the receptionist scans the license, to better track what marketing is putting customers through the door. The scanner we used enabled test-drive reporting by volume, time, make/model and salesperson, for far better sales person accountability (tracking closing rates and follow-up).

So, what are the benefits?

  1. No More IDs Fraud. Since installing the new scanner and “MUST SCAN IT PROCESS”, no vehicles have been bought or stolen with fake IDs.
  2. More Sales: Because the customer’s key info is transferred from scanner into the CRM (and identifies any lead or credit apps they submitted before), many more leads are getting captured and followed-up with. Our scanner and “MUST SCAN-IT PROCESS” are directly responsibly for a 10% increase in sales – or, about 50 incremental car sales a month throughout the organization. Dealerships don’t realize how many in-store leads they drop (and they’re the hottest possible prospects) – before “MUST SCAN_IT”, we often didn’t even capture the last names of so many test-drivers and showroom shoppers.
  3. Protection Against “Pulled Credit Without My Permission” Lawsuits: A consumer’s credit score can be affected when their credit is pulled. Recently we were nearly wrongly sued for this. Although my staff clearly remembers a female customer test-driving and applying for financing, she was adamant that she had never set foot in the dealership. Our CCTV tapes only went back 30 days, but our scanner keeps digital scans of IDs (with the license photo) for eternity, and found that she had indeed been in the dealership – and that her signed credit app matched her license. With the scanner proof, the allegation was dropped.
  4. Protection Against Titles Getting Kicked Back: In Texas (and many states) new laws require that the vehicle registration match the sales title exactly: i.e., if “Mark Gibson” is on the contract/title and the registration is for “E.M. Gibson,” the title gets kicked back and the title application is void. And it’s a costly headache to get that customer back in, and deals falls apart. Because the scanner captures the license exactly, and connects it to the CRM tool, now all documents are correct.
  5. Protects Against Expired Licenses: Our scanner instantly red-flags altered dates of birth and expired licenses – critical because if a person with an invalid license – or a 15-year-old with an altered one – drives a car on a test-drive and has an accident, your dealership is liable and your insurance premiums go up.
  6. In-Dealership Fraud Compliance: Red Flags and Safeguard Rules mandate that all dealers follow a written program procedure protecting against identity theft from employees. In Texas, a single infraction is $10,000. Having a digitized ID record trail removes a lot of pieces of ID once left in plain sight.
  7. Protects Salespeople from Harm: We hear of criminals using fake IDs pulling guns on salespeople during test-drives at other dealerships. Knowing that we can instantly identify any false-ID-toting criminal gives us peace of mind against this growing problem.
  8. Faster Sales Process: Using a scanner that connects the test-driver’s info to the CRM tool, and creates a new, instant information flow to sales and F & I has trimmed our total sales process by about 30 minutes.

After four cars stolen, our new scanner and “MUST SCAN-IT PROCESS’ process has given us a whole new level of ID fraud protection, while eliminating problems like lawsuits and compliance challenges.  But because it’s re-organized the sales process “kick-off” around a scan that captures customer info into the CRM, it has led to a 10% sales increase across the board. It may be a small piece of technology, and a simple new process, but those are BIG results.

Mark Gibson is a 27-year dealership veteran, and the E-Commerce & Internet Director and Compliance Officer for Benny Boyd Auto Group which spans nine stores across West Texas: from Benny Boyd Lubbock to Lamesa Dodge.

This article appeared in the Q3 2014 issue of the DrivingSales Innovation Guide:


Author: Pete Maclnnis

Author Bio: Pete brings over 40 years of experience in automotive finance and technology as Founder and CEO of eLEND Solutions™. Founded in 2003 as DealerCentric, Pete is leading the company’s evolution to an automotive FinTech company that specializes in digital credit and finance solutions designed to create a more efficient vehicle purchase process for the retail automotive industry.

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