Skip navigation
id fraud keyboard.jpg Getty Images
“Fraudsters look for the easy way,” says TransUnion's Melissa Gaddis.

Car Dealers, Lenders Play Whack-A-Fraudster

TransUnion releases an analysis of scam-related data in the coronavirus age.

COVID-19 is shaking up the ongoing game of “Whack-A-Mole” between auto dealerships and auto lenders vs. fraudsters.

So far, dealers and lenders seem to be protecting themselves well, according to fraud experts at TransUnion, a consumer credit bureau.

“Fraudsters look for the easy way,” says Melissa Gaddis, senior director-customer success/Global Fraud Solutions at TransUnion, which released an analysis of recent fraud-related data. “Businesses have to figure out where they’re moving.”

The good news (for auto retailers at least) is that fraudsters apparently think other areas look like greener pastures, especially coronavirus-related scams, according to TransUnion.

Gone Phishing

Because of high unemployment related to the coronavirus, fraudsters are counting on consumers letting their guard down, Gaddis says in a phone interview.

For example, “phishing” emails are up, where fraudsters impersonate, say, a local unemployment office seeking information on a jobless claim, or the Internal Revenue Service looking to send someone a refund, or contact tracers asking about recent interactions.

The goal is to get people to surrender personal information and/or unwittingly click a link that downloads malware.

“People are desperate,” Gaddis says. “They may have filed a claim. They’re expecting these emails. They are looking for their checks.”

Ups and Downs

TransUnion data indicates identity theft (where someone steals another person’s bona fide information) remains a problem at dealerships, says Lee Cookman, the company’s director-product strategy/Global Fraud Solutions.

Problems with so-called synthetic identities are down at dealerships, probably because of that “greener pastures” scenario, he says.

Synthetic identity theft involves fraudsters creating fictitious identities from various sources, establishing a respectable-looking credit history and ultimately securing an auto loan they certainly don’t intend to repay.

Meanwhile, Cookman says pandemic-related business shutdowns forced many dealerships to adopt all-online transactions faster than they would have normally. That makes those dealerships more vulnerable.

Checking IDs

Dealerships are already aware of the need to verify customer identification online. That’s why so many dealerships have slow-walked online transactions. So, many dealerships already have software to help verify identities. If they don’t, they’re looking into it, Cookman says.

“When there’s a government mandate, to either go 100% online, or go out of business, there’s an immediate demand,” he says, referring to recent state government COVID-related mandates that temporarily closed non-essential businesses such as dealerships.

For those who don’t yet have the ID-verification software, “all these dealerships are raising their hands,” he says.

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.