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Remote Deliveries: Proceed With Caution

When it comes to out-of-state deliveries, the magazine’s resident compliance guru says proceed with caution. He lays out a simple process for guarding your dealership against ID thieves.

March 2017, F&I and Showroom - Feature

by Gil Van Over - Also by this author

The digital evolution is not necessarily an overnight event. In fact, I recall working on a laser printing and digital solution for dealers in the early ’90s. Like the revamping of many processes, there were some roadblocks to clear. But that didn’t stop progress, did it?

For several great reasons, the industry is moving into the digital world. Even with the advantages this shift brings, some risks have also amplified. Going digital also means clearing some roadblocks for identity thieves, potentially making it easier to steal a victim’s identity and your inventory. Out-of-area deliveries are an excellent example.

An out-of-area delivery is any transaction in which the customer lives outside the dealer’s geographic footprint. Some ID theft cases involved customers who visited a dealership a few states away from the victim’s residence with manufactured identity and stips. In other cases, the ID thief conducted the entire transaction by phone and internet and the vehicle was shipped.

When you dissect an identity theft case, you will likely find some signs which, if investigated, may have prevented the crime. If the customer lives outside your market, has never done business with you before, and never steps foot in the dealership, proceed with caution.

Your out-of-area delivery process should be a separate and distinct part of your sales and F&I policy manual. It should include the following steps:

1. Obtain and vet the credit app: The credit application is one of the first signals of an out-of-area delivery. When the customer’s address is outside the dealer’s geographic footprint, immediately start the vetting process.

You might ask why the customer is trying to purchase from you — particularly if the vehicle is a model you have a 100-day supply of. Check whether the customer has done business with you before. Pull up a satellite image of the residence address. Be careful if you find a warehouse or a campground.

2. Vet the identity provided: You are familiar with the IDs generated from your state and maybe even neighboring states. You may not be so familiar with a state ID or driver’s license from another region. Use a search engine to view images of valid state IDs and licenses and review the ID against the images in the National Automobile Dealers Association (NADA)’s Title and License Guidebook.

Finally, ask for a second photo ID, and confirm that the wear and tear on both IDs are consistent with their age. If the ID was issued three years ago and appears brand new, watch out.

3. Complete the Red Flags review: Most dealers today use an automated process to conduct the bulk of their federally mandated Red Flags review. With authorization to pull a credit report in hand, run the review. If there are any Red Flags, proceed with your clearing process and retain your documentation.

Use the available out-of-wallet questions as an added precaution, particularly if the customer is not and will not be in the dealership. Some dealers have started leveraging the ability to Facetime with the customer as another approach to verify the customer’s appearance vis-à-vis the identity provided.

4. Complete the paperwork: For those customers to whom you have decided to ship the paperwork, you should seriously consider using available services that will send a notary to the customer’s residence to complete the signing of all paperwork. Alternatively, send the paperwork to the address on the credit application with delivery signature required. Note every spot the customer is to sign and require the signatures be notarized.

5. Deliver the vehicle: Many of the out-of-area deliveries that became identity theft cases have a common thread: The thief called the driver of the shipping company and had the delivery diverted to an alternative address. Make certain to get it in writing that the shipping company is to contact you if such a request is made before continuing with the delivery.

Taking some of these precautions can help to avoid some of the angst of identity theft. 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 gvo@bobit.com.

Comment

  1. 1. Art [ March 15, 2017 @ 08:06AM ]

    Hi Gil-
    I'm the Loss Prevention Manager and found your article interesting , timely and would like to use it in our Dealer Loss Prevention Manual if it's okay with you.. One area you did not mention, is upon delivery requiring the Transporter to provide Identification (Driver's photo ID.) What do you think?

 

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