Cox Automotive and Equifax, two of the industry's leading service providers, are now working together to tackle what may be the toughest challenge yet: eradicating fraud.
News of enhancements to the Dealertrack compliance solution with the addition of new synthetic ID fraud indicators has already been welcomed by dealers. David Giovine is director of finance for Subaru in Cherry Hill, New Jersey.
“Based on our location in the tri-state region, our dealers regularly do business with customers in New Jersey, Pennsylvania, Delaware, and New York, and many of our customers also reside in many other states. Because of heavy residence, identification can be complicated,'' Giovin said in a news release from Cox Automotive, which aims to protect dealers from fraudulent transactions early in the F&I process. He described the partnership with Equifax aimed at achieving this goal.
“It is not uncommon for our customers to have out-of-state credentials, so Synthetic ID Fraud Alert is designed to not only protect our dealers and customers, but also to ensure that our business is protected. “It's a very valuable tool that we're leveraging because we work with customers across so many locations,” Jovin continued.
The new Synthetic ID Fraud Alert is integrated with Equifax technology and combines patent-pending machine learning algorithms with proprietary data sources to detect synthetic ID behavior, with the ultimate goal of providing added peace of mind for dealers.
According to Point Predictive 2023 Auto Fraud Trends Report; The use of synthetic IDs has increased significantly, and fraud losses have increased to $8.1 billion. The report notes that installment contracts and vehicle leases are the third most common type of fraud reported over the past five years.
Experts point out that fraudulent activities using synthetic IDs are becoming more sophisticated. This type of fraud involves combining fake information with real data to create a credit profile.
“As the toll of auto fraud continues to grow, synthetic ID fraud is having an ever-increasing impact on the industry, and the need for advanced tools to protect dealers from the associated risks has never been more pressing. ” said Kate Gavin, Vice President of Operations, Title and F&I. Cox Automotive Solutions.
“Cox Automotive Dealertrack recognizes the importance of providing identity verification (IDV) insights to retailers to help them avoid the rise in increasingly sophisticated fraud. It enables dealers to leverage advanced technology to implement IDV best practices for online or in-store transactions and protect their business,” Gavin continued.
As dealers expand their online and omnichannel workflows, identifying potential fraud risks becomes increasingly difficult, Cox Automotive and Equifax said.
They emphasized that dealers who adopt synthetic ID fraud alerts can reduce that risk and protect their businesses from financial losses caused by these fraudulent activities.
This new service will allow dealers to receive alerts when a customer may be using a synthetic ID and obtain a risk level assessment score when withdrawing credit. All of these are designed to allow dealers to:
: Better address fraud risks and establish a more secure end-to-end process for transactions.
: Enhance early verification of consumers before they move forward with the financing process by adding an additional layer of security to detect fraud.
— Helps protect dealers from possible chargebacks from financial companies. Potential losses can be up to $15,000 per incident, according to a Federal Reserve study.
– Peace of mind in an era where fraud is becoming more and more sophisticated.
Learn more about Dealertrack's compliance tools. Via this website.
Dealers can also download the free 2024 Dealertrack Compliance Guide. Via this website.
