Dylan Bullock serves as general services manager at Grapevine Dodge, which is part of Texas-based Keating Auto Group that operates more than 30 stores in the Lone Star State.

During an online conference call on Monday organized by Capital One Auto Finance, Bullock shared a couple of recent events involving fraud that could serve as cautionary tales for both dealerships and finance companies.

Bullock began the first story by stating because his store is part of a large group, “Anytime there’s a fraud event at any one of our stores, we have central communication between the stores that will notify one or another.

“Because in many cases, if you have a fraud deal that you stop at one dealer, they’re not going to stop there, right? They’re going to continue to find a dealer that maybe doesn’t have the correct practices or policies or tools necessary to detect that fraud. We’re seeing that it’s on the rise. There’s no question,” he continued.

Then Bullock recapped another incident where diligence was put in place in conjunction with ProtectID, a real-time fraud detection tool embedded in Capital One Dealer Navigator. The protocols and tools helped an individual in the midst of a credit crisis.

“Maybe two or three months ago now, we actually intercepted and had suspicion about a deal that had some fraudulent activity,” Bullock said. “With the tools that we have, we stopped the deal. A day later, we get a call from the customer whose identity had been stolen.

“They said, ‘Hey, I believe someone’s out your dealership. They’re trying to use my information to buy a vehicle,’” Bullock continued. “And we let them know that not only did we not allow that transaction to occur, that we’d also reported it to the authorities.

“And the level of gratitude that the customer had on the other end, I mean, they’re in tears. You can tell on the phone,” he went on to say.

It’s situations like that one that prompted Capital One to create ProtectID with input from dealers like Bullock, who said any fraud prevention tool “has to be simple to use.”

Sanjiv Yajnik, who is president of financial services at Capital One, explained that being a bank and credit card provider along with vast involvement in auto financing helped to make ProtectID a robust tool.

“Capital One has over 100 million customers in the overall scheme of our financial services institution,” Yajnik said. “Transactions are happening every single second of the day across the entire world. And so we are seeing all these transactions happen.

“We are also getting informed about other fraud rings and other things that are going on across the globe. Now, one thing about fraud and fraudsters is that they change their identity all over the place. So, it’s very hard to nail down one particular person,” he continued. “They work in rings and in ecosystems. And so what we’ve done in Capital One, and we do billions of dollars of transactions on a daily basis, we map all the transactions to create links between different merchants and people and so on. So that, and we use machine learning and AI to actually bring all of that knowledge together.

“So that the next time a customer is swiping a card or next time a customer is doing a transaction or doing anything, we have a fair amount of certainty on whether that is a bona fide customer or not, or whether they’re even connected to someone else who is not quite on the right side of things,” Yajnik went on to say.

For dealers like Bullock and other users of Capital One Dealer Navigator, ProtectID has several components, including:

—When a dealer submits an application, ProtectID can initiate a soft pull and evaluate the application for risk, flagging suspicious activity in real time.

—Dealers are alerted of the suspicious activity on the application through notifications within Dealer Navigator, text message and email.

—The tool can outline what information on the application is deemed a risk and provides clear next steps to move forward.

—ProtectID operates entirely within the dealer’s existing workflow, so there are no added steps or separate systems or tools for it to work.

—If an application is flagged, the applicant is flagged and receives a secure verification link to confirm their identity. This includes phone number validation, government ID upload and selfie capture — all reviewed through Capital One’s fraud detection process.

—Verifications are completed before funding, helping reduce delays and ensuring secure deals from the start.

—Participating dealers have the ability to initiate fraud verifications directly through Dealer Navigator, giving them control and flexibility.

“Capital One gives us great tools for next steps saying, ‘We’ve identified these issues or these risks,’” Bullock said. “And then from there, we’re going to do the same thing that we’ve always done, assess the situation, assess the deal, and then make a decision because ultimately, it still is our decision as the dealer.”