Criminals don’t rely on fake pay stubs or forged signatures when they walk into your dealership anymore. 

They’re using synthetic identities. They’re generating STIPS with AI. They’re recruiting straw buyers, creating fake employers, and stacking loans. 

Modern day fraudsters are sophisticated, organized, and harder to spot. The fraud you thought you knew is gone. So are more than 80,000 dealership vehicles every year.

I was talking with a close friend last week. We’ve both been in the car business for over 20 years. He owns a multi-rooftop group in California, and I run a software company in the auto industry. 

His biggest concern isn’t inventory, fixed ops, or costs. He’s more worried about fraud right now, and he’s got company.

Experian says nearly nine in 10 dealerships consider fraud a significant concern.

Seven out of ten believe it’s getting worse.

Dealers report discovering an average of four fraudulent deals a year — many after the transaction has already been completed.

Nearly half lose $10,000 to $20,000 on a single deal.

Almost a third lose even more.

What’s worse is that 60% of auto lenders now mandate dealerships to buy back fraudulent loans, shifting the loss back to the retailer.

What are dealers up against? 

Here are just a few of the tactics fraudsters are using now.

  • “Synthetic identities” which are completely fake borrowers with legitimate-looking credit histories.  
  • AI-generated documents — like bank statements and driver’s licenses — that are so convincing, they fool a well-trained eye.  
  • Straw buyers, or a person with legitimate credit financing vehicles for someone else who doesn’t qualify. 
  • Bust-out fraud, where criminals spend months building excellent credit, then finance multiple vehicles before fading into oblivion. 
  • Fake employers, where businesses are fabricated simply to verify employment when lenders call.  

Once thieves take possession, they make cars disappear — or make money from them — ASAP.  Some are exported overseas, others are title-washed or given new VINs, rented out, or sold for parts before lenders or law enforcement realize what happened.

The dealer immediately asks, “Who missed this?” And it’s a valid question. “Was it sales? F&I? The lender? Transport? Titling?”

It isn’t just a new car problem, because criminals aren’t after transportation. They’re after assets they can turn into fast cash and used cars are often just as profitable, if not more. 

And it isn’t just an F&I problem.

I believe it’s a process problem.

Your dealership might have a great CRM, credit platform, identity verification tool, or compliance solution. None of these, individually, are the problem. The problem is what happens between them.

Think about the average car deal today.

The customer’s information gets entered into one system, then re-entered into another. Supporting documents get uploaded here and downloaded there. The lender asks for more information. Someone else uploads those additional details somewhere else.

Each step seems innocent, but collectively, they create exposure. That’s because everyone is looking at one piece of the car sales transaction, but nobody is looking at the entire picture anymore. And that’s when patterns disappear.

Professional fraudsters don’t exploit your software systems. They exploit the gaps that exist between your systems. In other words, they don’t need your process to fail. They just need it to bend.

Here are three things you can do today to mitigate fraud.

  1. Verify identity before you verify anything else.

If you can’t confidently establish who’s standing in front of you — or sitting behind the screen — nothing else in the deal matters. 

Everything downstream depends on getting this first step right.

  1. Close the gaps.

Every additional platform, login, transfer, upload, download, and re-enter creates another opportunity for something to be missed. 

Your goal isn’t to find a single magical fraud solution. It’s about fixing the gaps in your process so fraud can’t hide.

  1. Make every deal follow the same process, every time.

Fraudsters love exceptions — like busy Saturdays, a customer everyone likes and “trusts,” a rushed delivery, or a deal ready to close (that everyone pushes through) because it’s 9:00pm and your store is ready to close, too.

The strongest and safest dealerships rely on one consistent process for every customer and every deal, every time. 

Here’s how I see it.

The car deal tells a story.

Who is this customer? Where do they work? How do they earn a living? Does their income match their lifestyle? Does the documentation support the application?

Does their story make sense?

When that story gets scattered across seven or eight different systems, it’s much harder to notice when a chapter doesn’t fit.

Criminals have evolved and your process needs to evolve, too. The dealerships that win this battle aren’t the ones with the most software. They’re the ones with the strongest process.

Ben Gill is CEO of Advent Resources, a technology company that helps retailers move car deals from lead to funded through one connected platform. For more than 20 years, he’s partnered with dealerships across the U.S. to streamline workflows, reduce fraud risk, and deliver a better experience for customers and employees.

Ben Gill, Advent Resources