Dealer frau
d is more common today than it has ever been before, Pelican Auto Finance LLC Chief Executive Troy Cavallaro told AFN.
“The impacts for a financial institution can be significant,” he said. “We expect a certain amount of charge-off, but when too much of this gets through, it has a negative effect on the finance companies.” The most common types of fraud Pelican experiences are the misrepresentation of a customer’s income, and straw purchases, or purchases made on behalf of someone else.
Lenders must perform basic due diligence, Cavallaro said, such as obtaining pictures of the lot, making sure the dealer has valid licenses, and that a dealer isn’t floating cars on his lot with his own personal credit. It’s also a good idea to include some unusual information during the consumer interview and verification process, he advised.
For more from Cavallaro, check out the video below:
