Recommendations for dealers to verify buyer identification

November 24, 2023

As the number of vehicles stolen from dealerships by criminals posing as customers continues to rise, numerous recommendations are being offered by police services, industry associations, and insurance companies to try to prevent these situations.

Following an investigation earlier this month, which revealed more than $1.6 million in vehicles stolen from the Greater Toronto Area association of dealerships (none of which were named), the Halton Regional Police Services (HRPS) provided details of the criminal activity.

The individuals used forged credentials to impersonate representatives of a legitimate retailer to fraudulently acquire the vehicles and subsequently re-sell them. As a result of the findings of the investigation, the Ontario Motor Vehicle Industry Council (OMVIC) and HRPS urged dealers and their salespeople to be vigilant in verifying a buyer’s identity with a driver’s license and one other form of identification that includes the name and address.

OMVIC and HRPS provided some other ways to prevent fraud:

  • Use common sense and good judgment with prospective buyers;
  • If the transaction is making you feel uneasy, be cautious as scammers use high-pressure tactics;
  • Take steps to identify the vehicle an individual arrives in and other people associated with them when something doesn’t feel right;
  • Secure payment before transferring ownership;
  • Verify payment with the issuing bank (i.e. bank drafts);
  • Verify the buyer’s identity with a driver’s license and another form of identification. Be cautious with out-of-province identification;
  • Verify the legitimacy of the identification;
  • If they are not a repeat or loyal customer, be cautious about the deal when they want delivery right away; and
  • Be cautious with distant buyers, beware of sight-unforeseen offers or third-party transactions.

Canadian auto dealer contacted Sathyan Laloo, Director of Risk Control at Pitcher and Doyle, a provider of insurance solutions for dealerships across Canada, about vehicle theft.

“Is it preventable? Yes,” said Laloo. “You’re not going to catch them 100 per cent of the time, depending on how detailed you are. The only way to prevent that would be (to) not release the vehicle until the funds have cleared in your bank account.”

He also suggested increasing preventative measures after hours, because that’s one method criminals are using to steal cars. “They are generally looking for lots that are open, because you see a lot more of these things happen on dealerships that are a lot closer to the highway,” said Laloo. “They are wide open and with no physical protection.”

He also recommended dealers put all the keys in a Faraday box or bag. “Make sure your keys are stored properly and not randomly lying all over a desk as some dealerships are,” said Laloo.

He also strongly advises dealers to do a thorough background check on employees, because of easy access to keys. “If you don’t have an electronic machine, you may not necessarily know which keys go missing for which vehicles.”

Laloo also added that: “Sometimes, vehicles go missing and the dealerships don’t (realize) it until they do an inventory count (at) the end of the month. So it’s just being aware of everything around you and having a second set of eyes overseeing everything. There’s a lot of moving parts in a dealership and my job is to try to get more control or provide recommendations.”

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