Drivers License vs In Depth Validation

The deeper we dive into synthetic fraud prevention that is costing the automotive industry billions of dollars every year, the more I marvel at the technology these fraudsters have at their disposal. Also, they wait a long time while building the fake identity before making their move.

One thing that is becoming increasingly evident is that simply using a data base to catch these people is inadequate. We have partnered with TransUnion, who has one of the deepest data base verification capabilities of their own, and even they know that a synthetic identity looks and feels very real needing more capabilities to properly identify.

Here are some of the technologies that our document verification uses to deter the bad guys:

Drivers License biometrics that compare a selfie to the picture on the license. "Proof of life" detection showing if the selfie is a picture. Decoding the bar code on the back of the license and comparing it to the information on the front. Checking the specific state watermarks.

Sending a text to the prospect so they can take pictures of the front and back of the license plus taking a selfie facilitates all of the above.

Plus it now brings the smartphone into play for verification. Known as "device reputation" it can show whether it has been linked to any fraudulent activity before. It also identifies burner phones.

Of course in tandem with all of the above is the T.U. data base checking hundreds of variables tied to this individual. Top ranked fraud prevention data bases are ranked by companies like Forrester and Javelin. T.U. is always at the top.

When should this be initiated? There is a lot of debate on this. Early in the process, say before the test drive, takes the license out of employees hands and the risk of fines for being careless or even worse, criminal, with the license. However, the cost and imposition at that point is an issue.

At the time just before the hard pull is the other consideration which is pretty much universal in acceptance. It is important to do the verification before the vehicle leaves the lot.

It is interesting that the professional fraudster will not engage with this technology. They just move on to the next dealership that does not have it.

You will see more and more progressive Digital Retailing, CRM, DMS etc. vendors building this into their solutions. Our sister company Dealer eProcess will be one of the first.

On another note, A.I. is rapidly changing the scope of consumer engagement in our industry. With CreditMiner we are looking into partnerships that can send a Get Preapproved offer to someone visiting a website even if they never directly engage. Another A.I. partner scans social media sites for potential prospects enabling a strategic Get Preapproved offer to be sent. Numerous marketing companies are now using Preapproval offers for higher engagement.

FTC compliance is important with all this. Regardless of what type soft pull is done a "reasonably accurate" Firm Offer needs to be sent. Tying it to a specific vehicle makes it even more powerful.

Enough for now. Hope everyone has a great week. Stay cool if you are down here in Florida. The rest of the U.S. looks like a weather roller coaster right now, so just be safe. Until next week.