Car buying is increasingly moving online, and scammers who target car buyers are following suit.
“As fraudsters become more sophisticated and opportunistic, automotive dealers need to leverage the latest technology and advanced analytics to mitigate potential fraud risk,” John Gray, Experian’s president of automotive, North America, said in a news release Wednesday (Jan. 31).
“Not all fraud is perpetrated equally. Fraud Protect aims to help dealerships identify the most common fraud schemes and empowers them to take the most appropriate action to protect their portfolios and their bottom line,” Gray said.
Experian said its research has shown that almost 70% of businesses reported an increase in fraud losses in recent years. For car dealers, the release said, that means dealing with things like fraudsters who steal someone’s identity to buy a vehicle, or who knowingly misrepresents their identity to procure a vehicle for which they don’t intend to pay.
To combat this sort of threat, Fraud Protect lets dealers send customers — both online and in-person — a secure, dealer-specific URL via text, email or QR code.
“Once customers provide identity documentation, the information is cross-referenced against a wide array of data assets, including historical identity data and credit usage patterns, to identify potentially suspicious activity,” Experian said.
The launch of Experian’s new fraud prevention tool comes as online merchants are wrestling with the widespread impact of fraud. According to PYMNTS Intelligence research, more than 80% of these businesses experienced true fraud — verified instances of fraudulent activities, not just suspected cases or false positives — in the last year.
The PYMNTS Intelligence study “Fraud Management, False Declines and Improved Profitability” found that while human-driven fraud made up 21% of true fraud experienced, technology-driven fraud schemes, like phishing or cyberattacks carried out using bots or artificial intelligence, accounted for at least 61% of the true fraud encountered.
The report also underlined the challenge of accurately identifying the source of fraud attacks, with about 20% of confirmed instances of true fraud in 2023 leaving online retailers struggling to determine whether they originated from human- or technology-driven sources.
“This underscores a need for the eCommerce space to embrace screening mechanisms capable of differentiating and minimizing the impact of fraud, especially considering that 11% of online retailers do not employ screening tools to identify the cause of payment failures, as emphasized in the study,” PYMNTS wrote recently.