Our insured is a large automotive dealership located in the Midwest. Like most dealerships today, “Midwest Automotive” owes many of its sales to its solid web presence. So there was nothing unusual about the inquiry the sales manager, “Rick,” received on July 10, 2017.

The customer expressed interest in one of Rick’s highest-dollar units, a 2017 Jeep Grand Cherokee with all the bells and whistles. It had been floored for nearly a year. At $78,000, it had plenty of admirers but few serious interested parties. Moving this unit would make Rick’s day.

A deal was struck and the buyer, “Mike,” was approved for financing by a major lending institution. Rick obtained the necessary information from the buyer, who was said to live two states away, all via email. Mike provided a physical address where Rick could send the bill of sale for a signature. Rick promised to overnight the paperwork via FedEx.

Two weeks later, Rick received the signed bill of sale as well as the financing agreement. Rick immediately sent an acknowledgment email to Mike, thanking him for his purchase and asking him when he would like to pick up his new Jeep — which, by the way, now had an extended warranty for an additional $2,600, GAP insurance for $1,440, and sales tax of $5,773, making the total amount financed $87,813.

Mike thanked Rick for a smooth transaction, then said he had hired a transportation company to pick up the vehicle. “I wish I could be there to take delivery in person,” Mike wrote. “However, I’m unable to leave work for three days to make the trip.” Rick replied, “No problem, Mike, we thank you for your business and will make sure that we get your Jeep detailed and ready.”

When the transport arrived on July 28, Rick had Mike’s Jeep shined up and ready to go. He was happy to have made the deal via email and pleased with the terms.

A little over a week later, Rick received his check from the finance company that bought the deal. He paid off his floorplan lender and sent the title to Mike via FedEx, asking for his notarized signature to make the deal “official,” explaining it would then be filed with the state. He sent the parcel August 9, and a week later, it came back — marked “Undeliverable.”

Rick’s problems are getting ready to get worse. On August 21, he received a chilling call from the finance company. They had contacted Mike — the real Mike. He had denied ever having purchased a Jeep and said his identity had been stolen. They wanted their $87,813 back.

On August 25, Rick and Midwest Automotive filed a claim with their insurance carrier. As you can imagine, this is a very large loss for any dealership, no matter how big or small. It also proves, once again, that dealers must be aware of the dangers that await you on the Digital Frontier.

Brian Stout is a national general adjuster with 18 years’ experience and expertise in dealer open lot claims, inland marine and general liability for commercial insurance carriers.