DEALERSHIPS have been getting tough on car buyers after years of spotting red flags.
These firms are so sick of being victimized by fraudsters that they insist on five important checks before handing over the keys.
A potential buyer must provide five items of proof to proceed with the car purchaseCredit: Getty The crackdown came after an expensive experience with a fraudster 10 years ago, one dealer saidCredit: GettyMultiple car dealers in Michigan told the Detroit Free Press that they've been forced to crackdown on phony buyers after losing thousands of dollars to brazen thieves.
One such victim was Clarkston car dealer Katie Bowman Coleman, who spoke about a car being sold to a customer in Ohio, who was later discovered to have used a fake ID.
While the dealership's fraud insurance covered most of the cost of the stolen car, it still had to cough up $8,000 for deductibles and lawyer fees.
Bowman Coleman said: "Nobody wants to lose that kind of money and be out [of] the car, and then your insurance rates go up.
"Now we’re very careful... still, it’s hard to tell who’s legit and who’s not sometimes.”
The problem is that these financial losses then hit legitimate car buyers, who end up paying more and have to jump through hoops to purchase vehicles, warned experts.
ID Scan said in December: "Car dealerships and automotive industry businesses are a target for fraudsters, and large criminal enterprises looking for opportunities to steal high-value cargo or take out fraudulent loans.
"According to Experian, identity fraud... in the automotive industry accounted for $619 million in losses in 2022 and 79% of car dealerships have reported experiencing identity fraud-related vehicle loss."
Frank McKenna, chief fraud strategist at Point Predictive, a data and analytics firm, told the Detroit Free Press that dealerships "have to recoup those costs somehow, and eventually it gets borne by the consumer."
McKenna added that, as a result, "everyone pays for it with the inconvenience."
It means that car buyers are being asked to reveal several types of personal information, such as their pay stubs, a bank statement, and even copies of rental agreements.
They're also being charged $10 for credit checks.
A fifth thing they're asked to provide is proof of residency, such as an original utility bill because its bar code will confirm the buyer's address.
McKenna said that dealers are forced to request so many personal details as "so many people lie."
Here are some expert tips when buying a car from a dealership lot:
Source: Kelley Blue Book
Matick Automotive Group in metro Detroit said it rejects potentially dodgy buyers unable to verify their identification.
Partner Paul Zimmermann told the paper that only original documents are accepted as proof - not photocopies.
Also, driver's licenses are checked under a black light for the state of Michigan markings.
As a further step, employees keep a sharp eye out for customers misspelling names or providing an incorrect date of birth.
Zimmermann said that if they were unable to answer questions correctly, "that’s a red flag."
Gordon Chevrolet in Garden City told the paper the dealership spurned out-of-town buyers if they failed a five-question test.
Peter Horadan, CEO of Vouched, an online identity verification company in Seattle, said that another big problem caused by the fraudulent ID rort is that the credit of the person whose identity has been stolen is seriously damaged.
ID fraud involves using someone else’s sensitive information in a fraudulent or deceptive way.
ID Scan revealed that fraudulent IDs were most common in Texas, California, New York, Michigan, and Florida.
The service pointed to deepfakes as being "of the highest concern for businesses that operate remote verification of IDs."
It added: "Before turning over keys for a test drive, signing off on a purchase or rental agreement, or finalizing financing on a new car, it’s critical you know your customer’s true identity."