We are nearing the first full month with the new Administration and there has been lots of activity from the White House. Vaccine distribution is rolling out, COVID-19 cases are trending down across much of the country, and Congress has a stimulus package to address. All of these actions bode well for the powersports industry eager to ramp up sales.
There have been some notable actions around compliance. Former Federal Trade Commission (FTC) member Rohit Chopra has been nominated to head the Consumer Financial Protection Bureau (CFPB). During his tenure with the FTC, Chopra was active in pursuing abusive and discriminatory lending practices. Specifically, Chopra has signaled interest in establishing more protections against auto lending abuses, specifically for members of the military, Black and Hispanic consumers. If confirmed, Chopra would replace current CFPB head Kathy Kraninger.
As we can expect a renewed and revitalized federal compliance program, there is no better than now for a solid compliance training refresher for your sales and F&I staff.
We have had some much-needed good news over the past few weeks. Parts of the United States are opening to nearly full capacity. The number of unemployed workers declined a bit as businesses brought back furloughed staff or hired new team members. Powersports has seen a burst of good news with ATV and dirt bike sales exceeding expectations. While no one is popping any celebratory champagne corks, the positive headlines are a balm to our bruised economy.
However, the COVID-19 pandemic remains a real threat. Hot spots continue to flare, sending record numbers of people to the hospital. A large percentage of Americans are still hesitant to visit businesses in person, instead relying on the online platforms that have sustained their lives since mid-March. As a retail powersports dealer, how do you maximize your opportunities to sell vehicles?
Digital options pay off in productivity
Since we have all been forced to rely on our online tools during the shutdown, more powersports sales are taking place on digital platforms. Proactive dealers who encourage customers to use online shopping tools, including online chat, virtual test drives, trade-in valuation, and financing calculators are capturing greater returns. However, simply providing online tools is not enough to differentiate your dealership from the competition for today’s consumers.
Contributing Author: Steve Roennau Vice President EFG Companies
Those of us who are active on social media likely have created an “avatar” – an image designed to represent ourselves digitally. Defined specifically in computing language, an avatar is the graphical representation of the user or the user’s alter ego or character. The avatar image says, “This is the image I want to project,” but it might be less than accurate.
Even the person actually walking into your dealership might not be who they say they are – even if they have legitimate data, like a valid social security number tied to a legitimate address, to support their claim.
Synthetic fraud is the fastest growing form of identity theft in the U.S., comprising 80% of all new account fraud. The fraudulent tactic uses a combination of real and fake personally identifiable information (PII) to create new credit profiles and pump up credit scores, allowing the criminal to access goods and services.
The most common method of synthetic fraud is professional criminals using a variety of methods to make money exploiting the systemic weaknesses of the U.S. credit system. It may involve theft of a child’s real identity and applying for an employer identification number (EIN). Then, the criminal builds a synthetic credit profile with the victim’s real name, social security number, and date of birth (DOB), with a different address or phone number. Next, the professional criminal applies for credit through mortgage refinancing or a car loan, which pulls the report from all three major U.S. credit bureaus (Experian, Equifax and TransUnion). While the application may be denied, the process of reviewing the application creates a new credit profile at all three bureaus (also known as “tri-merging”) with the synthetic information. A few more steps and the fraudulent profile is complete, including lines of credit, employment history, mail received, etc. And now that criminal looks legitimate on paper.
With synthetic fraud, everything may seem legitimate at first blush. For the dealer, they move a car off the lot. For the lender, they have a loan in good standing. Unfortunately, the person who was originally assigned the particular social security number has no knowledge of the loan, and may never find out until the loan defaults or fraud is uncovered.
