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NHADAJun 29, 20231 min read

Beware: The Latest Sophisticated Scam Targeting Dealers

As is often the case, a new scam has emerged and unfortunately has affected one of our members. Here are the details to prepare you to take appropriate measures to assure this doesn't happen to you in the future.

A customer from out of state (Texas in this instance) called saying they wanted to buy a vehicle that was posted online. They agreed on the terms.  The customer then stated that they would wire in the funds, which is not unusual. So, the member sent them instructions to wire the payment to their online account. Their online account is set up separately from their general operating account as a safety precaution for their protection. 

Here is where the scam comes in: the customer went on to forge a check with the business' account number and bank information on the check. He wrote it out payable to himself, signed it, and presented it to the local bank in Texas to cash.  The Texas bank cashed the check and sends it along to the bank for processing.   The bank noticed it was unusual and reached out to the member for verification. The member declined, and their bank reimbursed them their money. They also contacted the bank in Texas.  Fast forward 3 days later and it happens yet again. Same scenario, different amount. 

For security reasons, this particular member had previously set up Positive Pay on their operating account, which prevents any check from being cashed or processed unless it matches the payee and amount information they provide to their bank daily.  While it is a few extra steps to set up, it stops problems before they happen.  They did not have it on their online account, since they don’t issue checks from that account.  Now, due to this scam, they have since implemented Positive Pay on all of their accounts.  It may be more work for administrative staff, but it is a necessary step in the ever-evolving fraud prevention landscape. 

NHADA encourages all members to be extra cautious with any out-of-state purchases that involve wiring funds to their accounts, and to consider implementing Positive Pay to protect their accounts should they encounter a situation such as the above.