Beware of False IDs, Identity Fraud Credit Companies Can Verify Social Security Numbers

Beware of False IDs, Identity Fraud Credit Companies Can Verify Social Security Numbers

In the April 15 WANADA Bulletin, we covered the issue of Protecting Against Identity Lawsuits. NADA also reported recently that it has received reports of an identity theft scam being used against dealers. Individuals who have fraudulently obtained another personês financial information are using that information to obtain vehicle financing and possession of new vehicles.

In a typical case, the fraud is discovered only when no payments are made on the loan or lease, and the vehicle is rarely recovered. Lenders may seek to recover the cost of the stolen vehicle from the dealer.

Many dealers also are seeing a variant of that problem involving false identity documents, particularly social security cards. This is a serious compliance issue in cash reporting and anti-money laundering programs since proper reporting of the identity of the buyer(s) and those providing cash is important. It is also a critical issue when deciding to spot deliver a vehicle.

Credit reporting agencies usually offer a service designed to verify the social security number given by the customer for a fee. This is a valuable service to identify stolen numbers or counterfeit social security cards. If your members do not want to pay the fee on all transactions,

they should consider asking the following questions to see if running a verification is warranted:

àDoes the transaction involve cash reporting on IRS Form 8300/FinCEN 8300?

àDoes the information on the credit bureau (ss #, name, address, dob) match the credit application precisely, and does the date of birth appear to match the person?

àDoes the information on the credit bureau or the credit application match the information on the customer’s drivers license?

àDoes the drivers license have the social security number or is it a different identification number?

àOn first time buyerês programs or college graduate programs, does the buyerês profile match the usual profile for this type of buyer? Is the buyer middle aged with no credit history whatsoever? How authentic do the identity documents or college diploma appear?

There is an active black market for counterfeit identity documents. For a small fee per transaction, dealers can verify a customerês social security number.

WANADA is grateful to kindred line member, lawyers Charapp, Deese & Weiss, LLP for their input on this follow-up article.