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IDENTITY THEFT PREVENTION PROGRAM
“RED FLAGS”
Red Flags are indications we may notice in the process of selling, financing or servicing a vehicle to individuals and/or businesses that may indicate a possible identity theft situation.
Compliance Officer/Program Coordinator: Jason Vianese
Team: Jeff Tucker, Stan Goleniewski, and Dan Alkas
Covered Accounts:
1. Individuals applying for credit and/or to purchase a vehicle.
2. Businesses applying for credit and/or to purchase a vehicle.
3. Individuals that apply for a credit account with the dealership for purchasing service and/or parts.
4. Businesses that apply for a credit account with the dealership for purchasing service and/or parts.
Red Flags:
The following identifies red flags indicating possible identity theft or attempted identity theft and a specific response.
(1) A fraud or active duty alert is included with a consumer report.
1. Before submitting an application for credit with a bank, obtain a consumer report.
A. Check for a fraud or active duty alert.
Response(s):
If a dealership employee engaged in submitting an application for a customer detects one or more Red Flags, the employee shall notify his or her manager and, before continuing to open the account, shall do the following:
1. Conduct a reasonable investigation concerning the Red Flag(s) detected, including obtaining additional information from the customer and third-party sources, and determine whether the Red Flag(s) detected or other circumstances require a specific response.
2. Specific response: Do not submit the credit application unless the following verification procedures are completed:
A. Contact the consumer using the telephone number or other means of contact stated in the alert, if any, and obtain authorization to proceed with opening the account.
B. Take all appropriate reasonable steps to verify the consumer’s identity and to confirm the credit application to open the account was not the result of identity theft.
C. Obtain and verify governmental photo identification.
D. Prepare and sign a written acknowledgement detailing how each of the above steps was completed.
(2) A consumer reporting agency provides a notice of credit freeze in response to a request for a consumer report.
1. Before submitting an application for credit with a bank, obtain a consumer report.
A. Be alert for notice of a credit freeze from the credit reporting agency.
Response(s):
If a dealership employee engaged in submitting an application for a customer detects one or more Red Flags, the employee shall notify his or her manager and, before continuing to open the account, shall do the following:
1. Conduct a reasonable investigation concerning the Red Flag(s) detected, including obtaining additional information from the customer and third-party sources, and determine whether the Red Flag(s) detected or other circumstances require a specific response.
2. Specific response: Do not submit credit application until and unless the consumer causes the freeze to be lifted and a credit report is obtained. Verify the consumer’s identity and confirm the application to open the account was not the result of identity theft.
(3) A consumer reporting agency provides a Notice of Address Discrepancy.
1. Before submitting an application for credit with a bank, obtain a consumer report.
A. Be alert for notice of a credit reporting agency of an address discrepancy.
Response(s):
If a dealership employee engaged in submitting an application for a customer detects one or more Red Flags, the employee shall notify his or her manager and, before continuing to open the account, shall do the following:
1. Conduct a reasonable investigation concerning the Red Flag(s) detected, including obtaining additional information from the customer and third-party sources, and determine whether the Red Flag(s) detected or other circumstances require a specific response.
2. Specific response: Do not submit credit application until and unless the Notice of Address Discrepancy Policies and Procedures are followed. This includes using no less than two official sources (i.e. government photo id, billing statements, etc.) to confirm the address given. If this information is sufficiently consistent to support a reasonable belief that the consumer report relates to the consumer about whom the Dealership requested the report, the report may be used and, subject to all other provisions of this Program, the application may be submitted to open an account. If the information from these sources are not sufficiently consistent to support a reasonable belief that the consumer report relates to the consumer about whom the Dealership requested the report, the credit application may not be submitted.
(4) A consumer report indicates a pattern of activity that is inconsistent with the history and usual pattern of activity of an applicant or customer, such as: (a) a recent and significant increase in the volume of inquiries; (b) an unusual number of recently established credit relationships; (c) a material change in the use of credit, especially with respect to recently established credit relationships; (d) an account that was closed for cause or identified for abuse of account privileges by a financial institution or creditor.
1. Before submitting an application for credit with a bank, obtain a consumer report.
A. Review the report for unusual or inconsistent activity.
Response(s):
If a dealership employee engaged in submitting an application for a customer detects one or more Red Flags, the employee shall notify his or her manager and, before continuing to open the account, shall do the following:
1. Conduct a reasonable investigation concerning the Red Flag(s) detected, including obtaining additional information from the customer and third-party sources, and determine whether the Red Flag(s) detected or other circumstances require a specific response.
2. Specific response: Ask the customer to explain the unusual activity.
(5) Documents provided for identification appear to have been altered or forged.
1. Before submitting an application for credit with a bank or completing the sale of a vehicle, obtain, inspect, and photocopy the consumer’s (or business customer’s representative’s) current driver’s license or other government-issued photo identification.
A. If involving a legal entity, obtain, inspect, and photocopy documents demonstrating the existence of the entity, such as certified articles of incorporation, a government-issued business license, a partnership agreement, or trust instrument.
2. Review the identification document for signs of alteration or forgery, using available information on forgery detection, if any, supplied by the agency that issues the identification document.
Response(s):
If a dealership employee engaged in submitting an application for a customer detects one or more Red Flags, the employee shall notify his or her manager and, before continuing to open the account, shall do the following:
1. Conduct a reasonable investigation concerning the Red Flag(s) detected, including obtaining additional information from the customer and third-party sources, and determine whether the Red Flag(s) detected or other circumstances require a specific response.
2. Specific response: Do not submit the credit application to open the account or allow the purchase of the vehicle to continue unless a reasonable and verified explanation that is not indicative of identity theft or forgery is provided that explains the appearance of alteration or forgery and the customer provides additional documentation to allow you to form a reasonable belief that the customer is who he or she claims to be. This may include requiring at least one additional non-forged/non-altered form of government-issues photo identification and at least one other non-forged/non-altered form of identification.
(6) The photograph or physical description on the identification is not consistent with the appearance of the applicant or customer presenting the identification.
1. Before submitting an application for credit with a bank or completing the sale of a vehicle, obtain, inspect, and photocopy the consumer’s (or business customer’s representative’s) current driver’s license or other government-issued photo identification.
A. Review the photo and physical appearance information on the identification and compare it with the consumer’s in-person appearance.
Response(s):
If a dealership employee engaged in submitting an application for a customer detects one or more Red Flags, the employee shall notify his or her manager and, before continuing to open the account, shall do the following:
1. Conduct a reasonable investigation concerning the Red Flag(s) detected, including obtaining additional information from the customer and third-party sources, and determine whether the Red Flag(s) detected or other circumstances require a specific response.
2. Specific response: Do not submit the credit application to open the account or allow the purchase of the vehicle to continue unless a reasonable explanation for the discrepancy that is not indicative of identity theft is identified and the customer provides at least one additional non-forged/non-altered form of government-issued photo identification and at least one other non-forged/non-altered form of identification.
(7) Other information on the identification is not consistent with information provided by the person opening a new covered account or customer presenting the identification.
1. Before submitting an application for credit with a bank or completing the sale of a vehicle, obtain, inspect, and photocopy the consumer’s (or business customer’s representative’s) current driver’s license or other government-issued photo identification.
2. If applying for credit, obtain customer’s signed credit application.
A. Compare the address and other information on the identification with information provided by the consumer in the credit application.
Response(s):
If a dealership employee engaged in submitting an application for a customer detects one or more Red Flags, the employee shall notify his or her manager and, before continuing to open the account, shall do the following:
1. Conduct a reasonable investigation concerning the Red Flag(s) detected, including obtaining additional information from the customer and third-party sources, and determine whether the Red Flag(s) detected or other circumstances require a specific response.
2. Specific response: Do not submit an application or sell a vehicle unless a reasonable explanation for the discrepancy that is not indicative of identity theft is identified.
(8) An application appears to have been altered or forged, or gives the appearance of having been destroyed and reassembled.
1. Before submitting an application for credit with a bank, review the credit application for signs of alteration or forgery.
Response(s):
If a dealership employee engaged in submitting an application for a customer detects one or more Red Flags, the employee shall notify his or her manager and, before continuing to open the account, shall do the following:
1. Conduct a reasonable investigation concerning the Red Flag(s) detected, including obtaining additional information from the customer and third-party sources, and determine whether the Red Flag(s) detected or other circumstances require a specific response.
2. Specific response: Ask customer to explain the apparent alteration.
(9) The person opening the covered account or the customer fails to provide all required personal identifying information on an application or in response to notification that the application is incomplete.
1. Before submitting an application for credit with a bank, review the information on the credit application for completeness.
Response(s):
If a dealership employee engaged in submitting an application for a customer detects one or more Red Flags, the employee shall notify his or her manager and, before continuing to open the account, shall do the following:
1. Conduct a reasonable investigation concerning the Red Flag(s) detected, including obtaining additional information from the customer and third-party sources, and determine whether the Red Flag(s) detected or other circumstances require a specific response.
2. Specific response: Require the customer to provide the missing information. If he or she does not or cannot, do not open the account unless a reasonable explanation that is not indicative of identity theft is identified explaining why the requested information is missing or incomplete.
(10) A buyer or co-buyer included in the vehicle credit sale or lease attempts not to be present for the signing of the contract or lease.
1. Submit an application for credit with a bank with the assumption that the execution of all documents and delivery of the vehicle will occur on-site, at the dealership’s facility. Be alert to any transaction where the buyer and/or co-buyer is not present or any effort by the customer to request or steer the transaction toward not having to be face to face with a finance manager and/or a sales person.
Response(s):
If a dealership employee engaged in submitting an application for a customer detects one or more Red Flags, the employee shall notify his or her manager and, before continuing to open the account, shall do the following:
1. Conduct a reasonable investigation concerning the Red Flag(s) detected, including obtaining additional information from the customer and third-party sources, and determine whether the Red Flag(s) detected or other circumstances require a specific response.
2. Specific response: Advise customer(s) that all paperwork and identification procedures used by the dealership for both buyers and co-buyers apply to all transactions. They must be in the presence of a dealership employee during the signing of the contract. Do not complete transaction if the customer directly or indirectly seeks to avoid compliance with all identification requirements. In extreme cases (i.e. guarantor for a company is in a home office in a far away state) the signature(s) must be notarized by a valid notary.
(11) A customer provides local residence and work addresses, but presents an out-of-state driver’s license or other government-issued identification.
1. Before proceeding with the transaction, review all paperwork, identification, and credit reports for inconsistencies in addresses and states.
Response(s):
If a dealership employee engaged in submitting an application for a customer detects one or more Red Flags, the employee shall notify his or her manager and, before continuing to open the account, shall do the following:
1. Conduct a reasonable investigation concerning the Red Flag(s) detected, including obtaining additional information from the customer and third-party sources, and determine whether the Red Flag(s) detected or other circumstances require a specific response.
2. Specific response: Ask customer about the inconsistencies. Then obtain state or federal paperwork to support the customer’s claim. If supporting documentation can not be presented or there are inconsistencies, terminate the transaction.
(12) A customer’s trade-in vehicle is titled or registered in someone else’s name.
1. Before proceeding with the transaction, review all paperwork, identification, and credit reports for inconsistencies in names.
Response(s):
If a dealership employee engaged in submitting an application for a customer detects one or more Red Flags, the employee shall notify his or her manager and, before continuing to open the account, shall do the following:
1. Conduct a reasonable investigation concerning the Red Flag(s) detected, including obtaining additional information from the customer and third-party sources, and determine whether the Red Flag(s) detected or other circumstances require a specific response.
2. Specific response: Ask customer about the inconsistency. If the reason seems legitimate, then:
A. Inform the customer that the owner of the vehicle must be in the presence of an appropriate dealership employee (finance manager, sales person) to sign the title.
B. Obtain, inspect, and photocopy the consumer’s (or business customer’s representative’s) current driver’s license or other government-issued photo identification and make sure it matches the title. If it doesn’t, do not accept the title/trade-in and be careful proceeding with the transaction. Make sure there are no other inconsistencies or Red Flags.
(13) A customer’s down payment check is written in someone else’s account.
1. Before proceeding with the transaction, review all paperwork, identification, and credit reports for inconsistencies in names.
Response(s):
If a dealership employee engaged in submitting an application for a customer detects one or more Red Flags, the employee shall notify his or her manager and, before continuing to open the account, shall do the following:
1. Conduct a reasonable investigation concerning the Red Flag(s) detected, including obtaining additional information from the customer and third-party sources, and determine whether the Red Flag(s) detected or other circumstances require a specific response.
2. Specific response: Ask customer about the inconsistency. If the reason seems legitimate, then:
A. Inform the customer that the person whose name appears on the account must be present in front of the appropriate dealership employee.
B. Obtain, inspect, and photocopy the consumer’s (or business customer’s representative’s) current driver’s license or other government-issued photo identification and make sure it matches the account. If it doesn’t don’t accept the down payment and be careful proceeding with the transaction. Make sure there are no other inconsistencies or Red Flags.
Identifying Red Flags
Identify “red flags” relevant to our business practices.
Sales
Account Executives should get valid state or federal picture identification from every customer that wants to begin the purchase process. While making a copy of the ID, the account executive should be aware of state and/or federal markings missing, tears or separations of the laminate, difference in address and date of birth, or any other evidence of tampering or out of place items.
When filling out credit applications or a buyers order, Account Executives, Sales Managers, and Finance Managers need to look for any differences in information provided and information on ID(s).
When running credit bureaus, Managers must be aware of additional information on the file, such as different addresses, social security numbers that don’t match, date of birth, etc. Also, check the entire bureau for fraud alerts or “frozen” alerts. If customer cannot verify fraud information or “thaw” the alert, proceed with caution and verify ID and all information provided. If there is a lot of recent activity, like new credit cards, lines of credit, etc. this could be a “red flag” for identity theft.
All Managers who process credit bureaus need to have a copy of the geographic social security number sheet to help identify a possible ID theft.
Parts
If a customer calls or comes into parts requesting a key to be made for a vehicle and they don’t have a copy of the registration for the vehicle the key is being made for and their identification does not match the name on the registration, then a key should not be made. The Parts employee should scrutinize the registration and ID for any discrepancies, etc.
Office
When someone is paying with a check for services rendered, verify identification. Make sure name(s) and address on ID match the check.
Detecting and Evaluating Red Flags
The Sales Account Executives are the front line in protecting identity theft. Sales Account Executives should always be aware of customer actions, such as nervousness, and lack of knowledge of basic private information. Watch and listen as customers respond to these questions, note suspicious behavior and report it to your immediate supervisor.
If we detect and decide to proceed with a suspicious individual, the senior manager should ask some additional questions such as previous address, employment, and other items that only the actual individual should know. These items can be verified against information on their credit report. Also, run an OFAC report.
Responding to Detected Red Flags
By checking and verifying information on credit bureaus, such as alias names, social security variations, difference in address, and incorrect dates of birth, we will reduce the possibility of someone using a stolen identity to finalize a purchase.
If a judgment call has to be made to either sell or refuse to sell a vehicle to someone who has presented “red flags”, keep all documents, questions, and records used in making the decision as they could be needed when called upon to defend that decision. This information should be kept for 7 years in a secured location that only authorized personnel have access to.
A copy of registrations and drivers licenses on individuals whom keys were made should be kept for 3 years in a secured location that only authorized personnel have access to. If there are any discrepancies, a key should not be made and the immediate supervisor should be notified.
If there is a discrepancy in regards to using a check without an ID or an ID that doesn’t match, don’t accept the check and notify an immediate supervisor.
If any supervisor is made aware of a suspicious or a fraudulent activity they should notify the General Manager so a decision can be made if the proper authorities should be contacted immediately.
Administering an ID Theft Program
Jason Vianese, General Manager, will oversee this program, assign responsibilities to dealership personnel, periodically update staff on ways to identify red flags/prevent theft, and put department specific practices in place with all personnel.
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