The new Synthetic ID Fraud Alert is designed to detect synthetic ID behaviors and help dealers guard against fraudulent transactions earlier in the finance and insurance (F&I) process, the company said in a Friday (Feb. 2) press release.
“As automotive fraud exposure continues to grow, synthetic ID fraud is increasingly impacting the industry, so there has never been a more pressing need for advanced tools to protect dealers from associated risks,” Kait Gavin, vice president of operations, titling and F&I solutions at Cox Automotive, said in the release.
The Federal Reserve has defined synthetic identity fraud as “the use of a combination of personally identifiable information to fabricate a person or entity in order to commit a dishonest act for personal or financial gain.”
Identity fraud is growing increasingly sophisticated as fraudsters leverage advanced techniques like artificial intelligence to fool banks’ and businesses’ automated verification systems, according to “Fraud Takes on a New Identity,” a PYMNTS Intelligence report.
Cox Automotive’s Synthetic ID Fraud Alert is integrated with fraud detection from Equifax and uses machine learning algorithms and proprietary data sources to assess the potential use of a synthetic ID, according to the company’s press release. It delivers alerts when customers may be using synthetic ID and provides a risk level assessment score when dealers pull credit.
This new offering helps dealers implement identity verification best practices into both online and in-store transactions, the release said.
This new solution helps dealers meet the challenge of identifying potential fraud risks at a time when they are expanding their online and omnichannel workflow and encountering increasingly sophisticated fraud, per the release.
One dealership that has implemented Synthetic ID Fraud Alert is Subaru of Cherry Hill in New Jersey, which regularly does business with customers from four states, many of whom have dual residences, the release said.
“Since it’s not out of the ordinary for our customers to have out of state credentials, Synthetic ID Fraud Alert is an extremely valuable tool that we utilize to not only protect our dealership as well as our customers, but also to ensure our business is protected when we are working with customers across so many locations,” David Giovine, finance director at Subaru of Cherry Hill, said in the release.