Experian Launches Cutting-edge Tool to Enhance Fraud Protection in the Auto Sales Industry
As car purchases increasingly move to online platforms, scammers are exploiting this trend with new fraud tactics. In response to the growing threat of online scams, information services company Experian has introduced a fraud prevention tool called Fraud Protect specifically designed for car dealers. This tool aims to enhance security measures, safeguarding the online car purchasing experience and protecting both customers and dealerships from fraudulent activities.
Scammers, adopting a tech-savvy approach, are increasingly targeting businesses with an online presence, with the automotive industry being an easy victim. According to a recent report by Experian, nearly 70% of businesses in various sectors have reported losses due to fraud in recent years. In the automotive industry, common fraud scenarios include scammers forging documents, stealing identities to make vehicle purchases, or misrepresenting identities during dealership visits.
Employing sophisticated tactics, these fraudsters send fake payment confirmation emails to deceive car dealers. In this scenario, scammers make it appear that the money has been debited from the customer and is on its way to the dealership's account. To avoid disrupting the customer's experience, dealerships may unwittingly allow the scammer to take possession of the vehicle. Even used car dealers are not safe, as scammers manipulate odometers and perform minor repairs to conceal significant damage, making it challenging for dealers to accurately assess a vehicle's value.
To address the rising threat of fraud in the automotive industry, Experian has introduced Fraud Protect for car dealerships. This innovative fraud prevention tool incorporates artificial intelligence at its core, utilizing advanced analytics and extensive datasets. Car dealers can send specific URLs to customers through text messages, email, or QR codes, prompting them to upload identity verification documents. Fraud Protect then validates these documents, cross-referencing historical records and analyzing credit histories. The application provides scores and raises alerts when suspicious patterns are detected.
John Gray, President of the automotive division of Experian for North America, says, "Not all fraud is perpetrated equally. Fraud Protect aims to help dealerships identify the most common fraud schemes and empowers them to take the most appropriate action to protect their portfolios and their bottom line." While the application is adept at safeguarding against common types of fraud, it serves as a tool to empower car dealerships in making informed decisions, recognizing that some clever schemes may still pose a risk.
"As fraudsters become more sophisticated and opportunistic, automotive dealers need to leverage the latest technology and advanced analytics to mitigate potential fraud risk," Grey added. Even though the application is quite smart, it can only safeguard against a few common types of fraud in the market. It is then up to the car dealer to take the final call.