The salesperson gives you a smile and a handshake, and the entire transaction is friendly and casual. They talk easily about your family, and tell you about how their son hit a home run in T-ball last week. He asks if he can offer you coffee? A doughnut? This might be the last place you’re going to be thinking about identity theft, but as the recent arrest of a dealership finance manager in Scottsdale, Arizona attests, consumers shopping for a new car have to be cautious about who they give their information to, particularly if that information is as sensitive as that which is required on a finance agreement.
As many as 12 customers at Henry Brown Buick-GMC-Pontiac had their personal information compromised by finance manager Dominick Hurley, who has also admitted to stealing as much as $28,500 worth of Best Buy and Lowe’s Gift cards intended for GM truck buyers through a recent promotion. Hurley, who local police have described as being a “career criminal” earned as much as $200,000 per year at the dealership legitimately, and may have stolen much, much more through his customers.
Given how sensitive customer financial information is, one might think that both dealerships and consumers would take greater measures to protect their information. Unfortunately, that simply isn’ the case. Maryann McKessy, Chief of the Fraud and Identity Theft Bureau of the Maricopa County Attorney’s office indicates that it is a far too common occurrence to see customer information breached at car dealerships. This is due in no small part to the friendly, laid-back atmosphere that car dealers strive to show their customers. In attempting to formulate a no-hassle buying experience, dealers, and customers tend not to think about security.
The auto industry in recent years has been trying to solve the problem of identity theft for consumers buying new cars, using what is called the Red Flags Rule, which requires dealerships to identify potential indicators of identity theft, and then work to close those loopholes. Dealerships not complying with the rule may be fined for each transgression in the same way that a health department inspects and fines a restaurant that doesn’t comply with health codes.
Preventing and insulating consumers from identity theft, particularly that which happens at auto dealerships, isn’t an easy task. One of the greatest complaints against Hurley’s dealership was that hiring managers did not subject Hurley to a complete background check, which would have turned up a 20-year history of identity theft and other criminal actions. The burden of protection can’t fall exclusively on dealerships, though.
Consumers wishing to insulate themselves from identity theft should consider adding identity theft coverage to their homeowner’s insurance policy. The coverage cost is typically minimal, but helps to get your life back on track should your credit come under attack. In addition, when shopping for a new car, it’s important for consumers to avoid allowing their personal information to remain unattended, particularly if the dealership uses a paper-based financing agreement. Never allow a salesperson to leave your finance agreement in plain view, and work to cultivate purchase relationships with both the dealer and the individual salesperson. If you’re working with a new salesperson, ask friends and family to refer you to salespeople that they have had good experiences with in the past.
Dealerships should perform criminal background checks on all employees, and take measures to reduce paperwork as much as possible. This can be done using what is called an electronic deal jacket. Because word of mouth is so critical in ensuring a dealership’s success, it is extremely important for both dealership managers and staff to do everything in their power to prevent identity theft. After all, it takes only one hole to sink the ship.
Sources:
Automotive News: Dealerships are targets for ID theives, both inside and outside: Amy Wilson: www.autonews.com