Identity thieves often practice their scams at dealerships, trying to drive away in a new car unwittingly financed by a victimized someone else. But there are ways to trip up these con artists early in the loan application process.
Randy Henrick, associate general counsel of DealerTrack, an online financing consortium, offers tips on how to uncover a con at the dealership finance and insurance office.
The trick is to ask questions they are not expecting about the past. Then watch the ruse fall apart. Here's what Henrick says to do:
- Ask what financial institution financed their last auto loan.
- Ask who is the lender on their mortgage.
- Ask their last address.
- Ask who was their last employer.
“Ask questions from the past, and you will trip them up early on,” says Henrick. “Identity thieves memorize social security numbers, mothers' maiden names and stuff like that. But they can't remember everything.”
Here's a social security number question to ask of credit applicants: “What state did you live in when you obtained a social security number?”
Why is that significant? Because a social security number's first three digits indicate what state the applicant lived in at the time of issuance. Since 1973, the numbers are assigned by zip code. Before that, each state had designated numbers. For instance: 050 through 134 are for New York, and 575 through 576 for Hawaii.
So, says Henrick, “if someone says their social security number was issued in Hawaii, and the numbers say New York, you've got a problem.”
He says it is wrong to assume most identity thieves are computer hackers in Russia or part of a faceless, far-off boiler-room operation.
“Sixty percent of identity thieves know their victims or are associated with them through an organization (i.e. work) giving them potential access,” says Henrick.
Dealership Customers Often Intolerant of F&I Mistakes
Dealership customers tend to be intolerant of mistakes in the finance and insurance office, says David Robertson, executive director of the Assn. of Finance and Insurance Professionals.
“F&I is one of those professions where stupidity is as bad as dishonesty, because mistakes are seen by consumers as dishonest,” he says. “There is no such thing as an honest mistake in F&I.”
That is why F&I staffers must be savvy, smart, ethical, trained and knowledgeable about compliance rules, he says. “Don't get shot with your own gun. You don't want your last thought to be, ‘I did something really wrong.’”
Robertson often testifies as an expert witness at civil suit trials involving F&I grievances, real or imagined.
Many lawsuits are filed “because of a mistake or excess in the F&I office,” he says.
But he notes that, in many lawsuits against dealerships, it turns out the employees acted properly. “If you are in F&I and do it right, your ability to defend yourself increases dramatically,” he says. “As skewed as the (court) system is, you'll prevail if you do it right and fair.”
But he adds: “Do you want to go to court and defend charging an 8-point reserve on a car loan before a judge who has had a bad car deal?”
When he is retained to testify in lawsuits involving a dealership, Robinson first always examines the pertinent paperwork.
“The paperwork talks,” he says. “It tells the story.”
— By Steve Finlay