Several NHADA powersports members have reported a scam involving buyers who receive lender approval and take delivery of a unit. After the unit leaves the lot, the lender flags the transaction and withdraws financing, leaving the dealership exposed to the loss.
Reports indicate the units are being moved to offsite storage facilities and resold on the black market.
Protect your dealership before releasing a unit:
- Read your lender agreements carefully. Understand when approval becomes final, what conditions must be satisfied for funding, and when fraud or other issues may leave your dealership responsible.
- Confirm outstanding requirements directly with the lender. An approval notification alone may not mean all funding conditions have been met.
- Document conditional sales. When financing is pending, have the buyer sign NHADA’s sale-contingent-on-financing form, available through LotDrop, before delivery. Review its use with dealership counsel; a signed form does not guarantee payment or recovery of the unit.
If you suspect fraud, promptly contact the lender and law enforcement, preserve all transaction records, and notify NHADA.