In 2021, vehicle-finance fraud jumped five percent to $7.7 billion--experts expect this rising trend to continue and continue wreaking havoc at dealerships of all kinds-- franchise; Buy Here Pay Here; power sports; RV--as well as finance companies.
The rise of synthetic identity theft
The driving force behind this worrying trend? Synthetic identity fraud—the combination of real and fake information to create a new identity—accounting for a whopping 80–85% of all identity fraud. What makes synthetic identity theft so dangerous is that it’s harder to spot and stop through credit-watch sites that quickly flag standard identity theft for consumers. Consumers might not realize they’ve been part of a synthetic identity scheme for months.
These synthetic identity fraudsters also want the loans to appear as normal as possible, making their actions equally as dangerous for dealerships and finance companies as individual consumers. Rather than being flagged as fraud, their aim is to make it look like a loan default. According to FICO, 10–15% of bad auto lending debts are, in fact, first-party fraud.
The risks of losing assets for dealers and finance companies
The average cost of vehicle-finance fraud is $21,000 per loan. For some dealers, it could take up to 10 sales to recuperate those losses. What’s more, many dealers and finance companies have no way to recover their assets. As Andy Pollock, an expert in vehicle-finance fraud told FICO, “The vehicle can be driven to a port, put into a container and shipped to another country. Or driven across the border to Mexico. Or sold to an unsuspecting victim. Whichever way, the vehicle is nearly impossible to recover.”
How GPS management systems can help combat vehicle-finance fraud
It might be obvious that your dealership and finance company should invest in a digital-lending solution platform to help you comb through documentation and information to confirm whether an identity is legitimate or synthetic. But it might not be as obvious why you’d want to invest in a GPS management system.
Recovering assets obtained through vehicle-finance fraud can be nearly impossible if you’re stuck in the pre-technology era. But with a GPS tracking platform in place, you can recover assets in record time and help improve your cash flow. A vehicle GPS tracking system will ensure you have real-time insights into the whereabouts of your assets and can deploy teams as necessary, thanks to intelligent analytics. Discover seven reasons why every dealer and finance company should invest in a GPS asset-management system.
How to leverage GPS management systems to combat vehicle-finance fraud
Depending on your chosen GPS management system, you might be able to do a whole lot more than simply locate your asset. Here’s how.
- Real-Time location data can provide you the location of your asset if it has been part of a fraud scheme. If you’ve been victim of synthetic fraud, your customer data may be completely false which makes knowing where your asset is even more important.
- Location history tells you the timeline of an asset’s movement. With it, you can identify whether an asset could be at risk. Is it on a trajectory toward a port or the border? Is it in an area known for chop shops? Such detail might help you determine whether an asset is part of a normal loan default or vehicle-finance fraud.
- Tamper-detection alerts help you stay informed if someone tries to remove the GPS tracking device, which can come in handy if the vehicle is being stripped for parts. The tamper detection alerts can also come in handy if someone is trying to get rid of the GPS so it can no longer be tracked.
- Geofencing enables you to keep tabs on an asset within a set radius. If it leaves that boundary, you’ll get automated alerts.
- Starter interrupt features enable you to disable an asset remotely, helping you buy extra time in your recovery efforts.
- GPS-assisted cellular-location technology can help you track assets in places like parking garages, warehouses or shipping containers where GPS alone might not reach.
- Battery-powered GPS devices can be installed discreetly in seconds to help you track assets cost-effectively and with confidence.
Why you should make PassTime your vehicle GPS provider of choice
For more than a quarter century, PassTime has helped more than 10,000 automotive businesses protect more than $10 billion in assets worldwide. We can boast a 99.6% device reliability rate. We’re recognized as a leading innovator in the vehicle asset-tracking industry with numerous awards. Key industry partnerships with Polte for cloud-based cellular-location technology set us apart from competitors.
Our suite of vehicle tracking solutions gives your dealership and finance company the flexibility and freedom to manage your inventory and assets how it’s right for your business goals and objectives. Need to track assets quickly and affordably? Use Encore, our wire-free, battery-powered GPS device that fits in the palm of your hand. Need a low-cost wired GPS device with pinpoint location tracking and geofencing? Choose TRAX. Want ultimate control of your GPS devices? Select GPS may be right for you. Want a customizable set of vehicle telematics to lower your vehicle financing risk? Go for Elite.
Not sure which GPS management system is right for your dealership or finance company fight vehicle-finance fraud? We can help.