San Antonio Dealer Falls Victim to Identity Theft in Fraudulent Vehicle Purchase

• By: Stephen Pallas
• On: 05/01/2024 16:57:14
• In: Texas Posts
• Comments: 0

The elaborate scheme involved an online application from a customer purported to be a legitimate customer. Initial due diligence, including credit checks, revealed no red flags. However, after the sale was completed and the vehicle was picked up by the customer's nephew, another dealership flagged the activity as suspicious. It turned out that the same individual was attempting to purchase another vehicle elsewhere.

When the dealership attempted to reach the customer, it received no response. Upon further investigation, the dealership realized it had been the victim of fraud. It became clear that the perpetrators had carefully stolen someone's identity to facilitate the fraudulent sale.

Despite filing a fraud report, law enforcement explained that this crime falls under identity theft. Only the actual victim whose identity was stolen can file an identity theft case, which doesn't directly address the dealership's loss. They explained to the dealer that the vehicle could not be reported stolen by the dealer because she handed the keys to the customer. The dealer was instead instructed to file a claim for fraud.

TIADA recommends dealers always talk to their local law enforcement because oftentimes these situations vary by jurisdiction and other factors.

The dealership, with help from a fellow TIADA dealer member, was fortunate enough to recover the vehicle after it was resold in Houston, but not without taking a financial loss on the original sale. However, this incident highlights the vulnerability of dealerships to these types of sophisticated scams.

The dealership owner emphasized in a statement, “We have fraud coverage in place, and this experience has underscored the importance of having robust insurance protection and investing in advanced identity verification software."

“If you are a victim sharing this with other dealers can help others to be cautious in situations like this,” the dealer added.

This incident serves as a stark reminder of the evolving tactics of fraudsters and the importance of dealerships being proactive in protecting themselves.

TIADA offers its online course, Complying with the Safeguards Rule, which offers detailed information on red flags and fraud prevention. Visit our website for more information and registration.