How quickly can things change? Just as remote work has presented new challenges and opportunities for employers and employees, remote sales for motor vehicle dealers has certainly presented challenges for dealers and opportunities for criminals. Since the beginning of COVID-19 in early 2020, remote sales have become more frequent as customers are hesitant to come to the dealership, and the retail motor vehicle transaction is becoming more electronic and online. In turn, this has significantly increased the theft of motor vehicles by individuals who have manipulated motor vehicle purchases and financing through false pretenses.

Obviously, the question becomes, “What can we do to help prevent these events from occurring?” The following is a list of suggestions to consider:

1. Review and Update Your Identity Theft and Prevention Program.

Since 2011, federal law has required motor vehicle dealers to have an Identity Theft Protection Program or “Red Flags Policy,” in place. I had the opportunity to draft dozens of these policies for dealers throughout the State of West Virginia. Allow me to stress that these policies, like most policies, are intended to be a “living document” to be reviewed on an annual basis or as your individual risk(s) change. I encourage a review of your Red Flags Policy to make sure that it incorporates the new risk associated with remote sales and that proper training and implementation is undertaken to stress its importance.

2. Verify, Verify, Verify.

Throughout this new retail experience, I encourage a more careful approach to the remote sale of motor vehicles, particularly to those potential customers not known to us and who are located out-of-state and hundreds of miles from your dealership. While it is certainly not uncommon for customers to search online to locate the vehicle of their choice, it also creates obvious risk for dealers. I am not saying you should be concerned about a customer you have known for 10 years or have sold multiple vehicles. This is for the situation of a first-time buyer wanting or demanding for a complete online or remote experience. I strongly encourage the use of technology to verify identity, such as Zoom, FaceTime and Google Meet. All of these applications have versions that are free and easy to use. An excellent practice to implement, after receipt of a copy of the customer’s driver’s license and the personal information is verified through normal processes, is to simply arrange a video meeting or call with the customer. Carefully review all the data with the customer and ensure that the person on the video call looks like the photograph on the provided identification information you received. This one task can be quite easy and effective to limit our exposure.

Another potential tool is the use of a notary service. No matter the location, a notary will appear and meet with the consumer and obtain signatures. One service I have heard about is Maverick Signings, but I am sure there are other companies available. This can be a deterrent to fraud if the person is required to appear and meet with another person.

3. Creation of a Check List.

While your existing Identity Theft Protection Program or Red Flags Policy should have a checklist that is used to verify proper identity, a more detailed checklist needs to be created in today’s remote market. I would recommend you consider requiring the F & I Manager to do the following tasks:

• Verification of the Social Security number and clearance on the SSDI check list. Also, do not forget the manufacturer’s exporter list.
• Review the Credit Report for warnings, such as multiple credit bureau inquiries in the last 60 days, or the opening of numerous accounts, including bank accounts in the last 60 days.
• Verify employment by directly contacting the employer and requiring a paystub.
• Verify insurance coverage by contacting the agent/insurance company directly and requesting the policy information.
• Request two (2) sources of identification, including one (1) government-issued photo identification.
• Verify that final signatures match all documents.
• Ensure that co-applicants are scrutinized as closely as the primary applicant.
• With business applicants, obtaining a copy of the articles of incorporation or organizational document would be potentially warranted, along with a resolution from the company allowing the purchase or the entering of the transaction. Remember, most basic corporate/business information is available online with the Secretary of State.

4. Verify Funds.

Appreciating that this can be somewhat difficult, but if a credit card is used, there should be some time frame of holding the vehicle until the credit card charge is approved. Likewise, verification of sufficient funds at the customer’s bank and date that the account was opened may be warranted. I also recommend requiring a cashier’s check or certified funds for large down payments. While a remote transaction is for the convenience of the customer, I would hope that a reasonable customer would understand that confirmation or receipt of funds and a delay for delivery of the vehicle would occur. It is frequent that individuals engaged in these types of fraudulent transactions may attempt to use a time-sensitive excuse or place pressure for this to occur quickly.