Association Events
Learn about NHADA's major events and fundraisers.
The Pitfalls of Speed and Convenience
At the core of these attacks lies a misplaced confidence in speed and convenience. Cashier’s checks remain more trustworthy than personal checks, but fraudsters know dealers tend to release vehicles as soon as funds post. Because banks must make these deposits available quickly—even if they take a week or more to authenticate fully—scammers press for immediate delivery. Synthetic-identity tactics make the threat more complex: criminals stitch real Social Security numbers together with fictitious names, addresses, and employment records. Initial credit and identity checks pass, financing is approved, and the deception only surfaces when payments bounce and the buyer vanishes. To guard against these evolving vulnerabilities, dealerships must bolster their remote-sale protocols with robust verification and oversight measures.
Strengthening Remote Sales
The first line of defense is rigorous buyer authentication. Treat every phone or online sale with the same scrutiny reserved for high-value in-person transactions. Require multiple forms of ID, run credit reports on cashier’s-check deals, and verify contact information independently—looking up issuing banks through official directories rather than relying on buyer-supplied details. Third-party databases can confirm employment and residence, adding another layer of assurance. While these steps may add a day or two to the process, they transform a potential loss into a secure sale.
Behind the scenes, establishing clear, centralized approval processes prevents a single employee’s eagerness from undermining your safeguards. Instituting mandatory hold periods on funds from out-of-state sales or third-party shipping transactions allows time for full authentication. Dealership-management systems can flag any remote sale above a dollar threshold or any order requiring external carriers. Routing high-risk payments through a verification team ensures that no vehicle is released without proper managerial sign-off.
Staff training ties every element together. Every employee—from showroom hosts to logistics coordinators—must recognize red flags: unusually large or bulk purchases, last-minute shipping instructions, reluctance to meet in person, or communications that avoid direct contact. Conduct regular workshops using real-world examples and role-playing exercises so team members learn to pause and escalate concerns. By encouraging a culture that rewards vigilance over speed, you turn employees into active protectors of your bottom line.
Rapid Response and Collaboration
Even the best defenses cannot guarantee zero fraud attempts. When a suspect transaction arises, swift, coordinated action can limit damage. At the first hint of trouble, senior management should convene to assess exposure. If the vehicle remains on your premises, instruct the carrier to halt or intercept shipment immediately. If goods are already en route, file an insurance claim and contact your bank to reverse the deposited funds before they are clawed back without warning. Preserve all records—emails, phone logs, check copies, and carrier receipts—to support disputes and investigations.
Sharing intelligence with peers strengthens the entire dealer network. Report incidents to your state association or local trade group, supplying sample check numbers, fraudster contact details, and excerpts from communications. Associations can distribute bulletins that alert other dealerships to emerging schemes, making it harder for criminals to succeed elsewhere. Filing comprehensive reports with law enforcement and, when appropriate, federal authorities gives investigators the best chance to dismantle fraud rings rather than chase lone actors.
The Road Ahead
Remote sales offer undeniable benefits—meeting customer demands for convenience and contactless service. However, those advantages carry heightened risk. Dealerships that integrate fraud prevention into their customer-service ethos will protect both their bottom line and their reputation. By combining rigorous buyer verification, centralized fund-clearing processes, ongoing staff education, and targeted technology tools, you can enjoy the speed and flexibility the market demands without exposing yourself to crippling fraud. In an environment where every transaction carries potential risk, taking the necessary time to confirm identity, funding, and intent is the surest investment in your dealership’s future.
Author: Erika Gagne, CPA
