5 Common Denominators of Identity Thieves
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Identity Theft: Not an Opportunity To Do Business

Identity theft is no joke, there is a lot at stake today and we all must stay vigilant.

identity theft, fraud, car dealership

By Brian Stout, executive general adjuster

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Over the course of the last few years, I’ve seen a significant uptick in dealer open lot insurance claims for false pretense, usually in the form of identity theft. This should come as no surprise given the digital age of social media, social engineering and cyber hackers. It seems as though the threats to steal our personal information are under constant attack by cyber thieves and the pandemic has only acted as a vessel for those looking to takeover someone’s identity.

Understanding the threat of identity theft is only part of the battle for auto dealers, who like any business, have been affected by inventory shortages, staffing changes and, well, the rising cost of just about everything due to inflation. Auto dealers must also deal with individuals entering their dealership, or online, who have assumed another’s identity. For most salespersons, finance managers and sales managers, the mere thought of someone presenting fraudulent information is not necessarily part of their training or something they have been “warned” about. I’m here to tell you, not only should they be warned about it, but they should also understand the importance of due diligence when confirming someone’s identity.


We have all heard the old saying, “if it’s too good to be true, then it probably is,” well, what I see on nearly every insurance claim presented against a dealer open lot policy for false pretense or fraud involve several common denominators.

5 Common Denominators

The first common denominator is checking up on a buyer’s references (in some cases, the salesman puts himself as a reference, which is a terrible decision) or not confirming their income. The second common denominator is a buyer who is willing to purchase a vehicle at 10-20% over the book price. The third common denominator, which presents itself in the finance department, is when the identify thief purchases the extended warranty, which I typically see $10,000 to $12,500, about the most they could possibly pay. The fourth common denominator is gap insurance (which would be necessary, given how upside down the buyer will be when they leave the dealership). The fifth common denominator, yes there’s a fifth in every deal, is an interest rate at minimum 2 points higher than someone with a 700+ credit score should have. When the deal is done, someone came in to purchase a vehicle for $55,000 and left with a $80,000 loan, all the while using someone else’s identity.


While all five of the above common denominators may not exist in every false pretense claim filed, I’ve not seen less than four of them in any claim I’ve handled, and after so many, you see a trend. I’m not here to slap anyone’s hand, but at some point, when the deal is so juicy everyone gets wet from the squeeze, it’s important to do your part and do your best to confirm the identity of the buyer before it’s too late.

Identity theft is no joke, there is a lot at stake today and we all must stay vigilant. I’ve seen identify theft victims lose everything they have; salesman lose their jobs or get arrested and high-dollar insurance claims get denied as a result of simple measures the dealership could have taken yet did not.


We have also heard the saying, “buyer beware,” but I’m here to say, “salesman beware,” because I can tell you, identity theft is not an opportunity to do business.  

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