National Automobile Dealers Association chairman Charlie Gilchrist recently wrote about how data and digital issues remain a high priority for the organization.
And it appears those topics certainly are being monitored by the Federal Trade Commission, too.
Early this week, the regulator announced an Iowa company that sells software and data services to dealers has agreed to take steps to better protect the data it collects, to settle allegations that the firm’s poor data security practices led to a breach that exposed the personal information of millions of consumers.
In a complaint, the FTC alleges that LightYear Dealer Technologies (doing business as DealerBuilt) failed to implement readily available and low-cost measures to protect personal information it obtained from its dealer clients.
“Today’s announcement reflects additional and significant improvements to the FTC’s data security orders that will further protect consumers and deter lax security practices,” FTC chairman Joe Simons said in a news release.
“The settlement with DealerBuilt imposes more specific security requirements and requires company executives to take more responsibility for order compliance, while also strengthening the third-party assessor’s accountability and providing the FTC with additional tools for oversight,” Simons continued.
Officials recapped that DealerBuilt develops and sells dealer-management system software and data processing services to dealers across the country. The software collects large quantities of personal information about dealership consumers, including names, addresses, birth dates and Social Security numbers. Its payroll software collects similar information from dealership employees, along with bank account information.
The FTC alleged that the personal data DealerBuilt collected was stored and transmitted in clear text, without any access controls or authentication protections.
According to the FTC’s complaint, a DealerBuilt employee connected a storage device to the company’s backup network without ensuring that it was securely configured, leaving an insecure connection for 18 months.
The company never performed any vulnerability scanning, penetration testing or other measures that would have detected the vulnerability, according to the complaint.
The FTC also alleged that DealerBuilt failed to take other steps to protect personal data stored on its network such as developing, implementing or maintaining a written information security policy and training for employees; using security measures to monitor its systems and assets; and imposing reasonable data access controls.
The regulator went on to allege these failures led to a breach of DealerBuilt’s backup database beginning in late October 2016 over a 10-day period, when a hacker gained access to the unencrypted personal information of about 12.5 million consumers stored by 130 DealerBuilt customers. The hacker downloaded the personal information of more than 69,000 consumers, including their Social Security numbers, driver’s license numbers and birthdates, as well as wage and financial information.
Officials pointed out DealerBuilt did not detect the breach until it was notified by one of its dealer customers, who demanded to know why its customer data was publicly available on the Internet, according to the complaint. The types of personal information stolen from DealerBuilt — names, addresses and Social Security numbers — are often used to commit identity theft and fraud, the complaint noted.
The FTC alleged that DealerBuilt violated the FTC Act’s prohibition against unfair practices and the Gramm-Leach-Bliley Act’s Safeguards Rule, which requires financial institutions to develop, implement and maintain a comprehensive information security program.
As part of the proposed settlement with the FTC, DealerBuilt is prohibited from transferring, selling, sharing, collecting, maintaining or storing personal information unless it implements and maintains a comprehensive information security program designed to protect the personal information it collects.
Among other things, the order requires DealerBuilt to implement specific safeguards that address the allegations in the FTC complaint.
The proposed settlement also requires the company to obtain third-party assessments of its information security program every two years. Under the order, the assessor must specify the evidence that supports its conclusions and conduct independent sampling, employee interviews, and document review.
In addition, the order requires a senior corporate manager responsible for overseeing DealerBuilt’s information security program to certify compliance with the order every year. Finally, the order grants the Commission the authority to approve the assessor for each two-year assessment period.
The FTC vote to issue the proposed administrative complaint and to accept the consent agreement with DealerBuilt was 5-0.
The regulator reiterated that it issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the FTC that a proceeding is in the public interest.
When the FTC issues a consent order on a final basis, officials explained it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $42,530.
Launcher is looking to help not only well-established subprime auto finance companies, but also shops looking to get a toehold in the space while they stretch their limited resources.
The technology provider specializing in loan originations, recently announced the release of its new product offering, appTRAKER launchPAD, which is a loan origination system packaged with all of the essential features necessary to propel startups and small finance companies off the ground.
Launcher explained launchPAD was created for finance companies that are looking for a fully-functional loan origination system without the expensive price tag.
“We recognized that there isn’t a good product available for smaller institutions who want a feature-rich system,” Launcher president Nikh Nath said. “We have found that lenders, irrespective of their size, desire access to the same tools in order to succeed, compete and grow. We have developed a solution that is easily implemented, contains all of the necessary origination tools and provides a robust platform for their users.”
Nath went on to highlight launchPAD was designed to be an out-of-the-box solution with little to no additional configuration needed. This functionality is geared to provide finance companies with a quick turnkey implementation to get them originating loans within launchPAD in just a few days.
The company added finance companies will not miss out on functionality as launchPAD is bundled with the same suite of products as Launcher’s appTRAKER Loan Origination System. Finance companies will have access to Dealer Portal, a unique solution that can facilitate more efficient interaction between the finance company and its network of dealers.
Along with application submission and decision information, Dealer Portal can offer communication with live buyers and allow dealers to track the progress of verifications, stipulations, and funding distributions. Finance companies will also have use of appTRAKER DOCS for paperless Document Management and retention along with myDEALER.CARE, a Dealer Relationship Management system for organizing their dealer base.
“As lenders grow, they will be able to seamlessly grow into our fully customizable solutions without any loss of history or data,” Launcher said.
To learn more, go to www.launcher.solutions.
First Investors Financial Services (FIFS) is now using a pair of cloud-based loan solutions fueled by defi SOLUTIONS.
Officials highlighted the Houston-based subprime auto finance company went live on the defi loan origination and analytics systems (defi LOS and defi ANALYTICS) in just four months.
“We needed an innovative platform and partner who understood our business and could stand up the system quickly,” FIFS president and chief executive officer Tommy Moore said.
“Throughout every twist and turn of this project, the defi team was professional and timely. They gave us just what we needed: a strong partner and advocate during this critical transformation,” added Moore, who was the 2017 Subprime Auto Finance Executive of the Year.
The company added defi LOS supports FIFS’ need for sophisticated underwriting that includes custom scorecards, auto decisioning and auto deal structuring, as well as analytics and reporting from near real-time data. With system enhancements added weekly, defi founder and chief executive officer Stephanie Alsbrooks said defi LOS will allow FIFS to better serve its customers now and well into the future.
“FIFS has been a principal player in the automotive finance market for more than 30 years, and we’re excited to work with them and ensure they have precise control over their lending processes,” Alsbrooks said. “Now that their defi system has gone live, we look forward to partnering and innovating with FIFS to help them achieve the goals they set in the years to come.”
PointPredictive chief fraud strategist Frank McKenna joined Nick for the episode that focused on the achievements of the Auto Fraud Consortium, a wide-ranging collection of finance companies that are collaborating to reduce the volume of fraudulent paper infecting their portfolios.
McKenna explained how the confidential sharing of data combined with the latest developments in artificial intelligence and other tools are providing consortium members with valuable results.
The full discussion can be found below.
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Organizers of the 23rd annual Non-Prime Auto Financing Conference hosted by the National Automotive Finance Association have solidified their agenda that covers an array of topics again this year.
From the NAF Association/AFSA Non-Prime Auto Financing Survey and a look at the auto ABS market to what’s being dubbed as “Fraud Friday,” this year’s event contains three days of informational presentations and networking opportunities, beginning on June 5 in Plano, Texas.
“The program is very good. It covers many aspects of non-prime auto financing,” NAF Association executive director Jack Tracey said.
Some of the experts slated to share their insights during the conference include:
— Ben Werner, FICO
— Amy Martin and Rahel Avigdor, S&P Global Ratings
— Jonathan Smoke, Cox Automotive
— Chris Burt, GM Financial
— Michelle Whatley, Exeter Finance
— Eric Johnson, Hudson Cook
— Mark Edelman, McGlinchey Stafford
— Penny Campbell, Jefferson Capital Systems
— Kip Cochran, Texas Dealer Solutions
— Sharon Mancero, Wells Fargo Preferred Capital
— Kelly Blankenship and Richard Hudson, Ignite Consulting Partners
— Frank McKenna, PointPredictive
— Joe Cioffi, Davis & Gilbert
— Josh Wortman, General Forensics
Also, graduates of the NAF Association’s Certified Consumer Credit Compliance Professional Program can earn up to eight credits toward recertification during the conference.
Complete agenda and registration details are available at www.nafassociation.com.
Intended to target the subprime space, MicroBilt recently launched Bank Account Verify Advantage (BAV Advantage); a new product that uses verified bank data to assist auto-finance companies and other lenders in scoring applicants.
MicroBilt highlighted that BAV Advantage looks across a proprietary database of more than 150 million consumer records and 1.5 billion ACH and check transactions to deliver what the company says is “a full 360-degree” view of a consumer’s loan and bank performance history — including loans associated with that bank — based on a submitted account and routing number.
“BAV Advantage uses an algorithm to assess an individual across a multitude of data points including risk factors associated with financial institutions. The product returns a score on the same scale — and with the same implied meaning — as a traditional credit score,” MicroBilt’s Sean Albert said.
In addition to the score, the report can return data to both inform the decisioning process and protect the finance company from fraud.
“We match the account number to the bank’s formatting. We match the routing number to the bank. We confirm the submitted name matches the account name,” Albert said.
Additional data returned includes the current status of the bank account, verification of ability to receive ACH transactions, a 36-month history of MICR and loan transactions, and flags for risk factors that might impact the ability to repay a loan.
Keith Goodnight at MicroBilt explained the inspiration for the new offering.
“We designed BAV Advantage for the subprime market. With BAV Advantage, lenders can look at the individual’s banking behavior, at how they historically handle money,” Goodnight said.
“It gives them actionable data sources where they may not have had them before. It also gives a fair shake to people who might not have a traditional credit score,” he went on to say.
Another finance company is seeing the potential benefit of leveraging Dealertrack Accelerated Title.
After recently reaching relationships with Westlake Financial Services as well as dealer associations in Louisiana and Wisconsin, Dealertrack this week announced that KeyBank Dealer Retail Services has selected the company’s solution to help expedite its vehicle payoff and title release process with dealers accepting vehicle trade-ins.
For more than 60 years, KeyBank Dealer Retail Services has been dedicated to helping dealerships nationwide succeed through competitive commercial banking and retail financing solutions. By activating the Accelerated Title solution, KeyBank can now offer dealers increased internal efficiencies, reduced processing costs and faster title turnaround service.
With Accelerated Title, dealers and lenders gain a seamless connection between the payoff process and title receipt. Bringing these two processes together removes the need for dealers to hand write and mail checks overnight, and then wait for the delivery of the title, which according to industry standards could take 12 to 18 days or more.
Dealertrack’s unique finance company and dealer solution can provide the exclusive ability for titles to be released to dealers in as quickly as four to six days, substantially speeding up the standard payoff and title release process by up to 70 percent.
As dealers continue to battle with margin compression, Dealertrack insisted that it’s integral that their partners provide new ways to maximize efficiency and cut costs. On average, Dealertrack estimated that dealers pay a holding cost of $32 per day, per vehicle that sits idle on their lot.
In addition, Dealertrack spotted long-standing proprietary research that indicated vehicles holding a title are nearly two times more likely to sell on the first pass through an auction lane than those without titles.
“We are always looking to optimize our services and improve efficiencies for our dealers,” said Craig Stickney, national director of KeyBank Dealer Retail Services. “With Dealertrack Accelerated Title we can speed up the title release process, while also helping dealers quickly turn around inventory and reduce holding costs.
“These savings in both time and money not only benefit KeyBank, but also our dealer partners who are trying to meet changing customer expectations and navigate today’s margin-compressed environment,” Stickney continued.
Accelerated Title can allow what Dealertrack said is “unprecedented” visibility into the titling process to ensure validity of the trade before the deal is finalized. It also can equip dealers with 24/7 title tracking, reporting and statements so clients know exactly what’s happening with every transaction.
“The ability to expand our partnership with KeyBank Dealer Retail Services to bring Accelerated Title to more dealers is a great milestone as we continue to see unprecedented title turns on trade-ins, increased profitability for our connected dealers, and a seamlessly connected workflow between lender and dealer partners," said Kaitlin Gavin, vice president and general manager of Dealertrack Registration and Title Solutions.
“With more than $1 billion in payoffs processed for our lenders last year, we are working tirelessly to streamline the titling process and create efficiencies for dealers and lenders to help both parties boost productivity and profitability long-term,” Gavin went on to say.
Celebrating its 50th year in the consumer lending market, Carleton looked to enhance its suite of solutions this week.
Following extensive market feedback and discussions with key partners, Carleton released CarCalcs, a comprehensive and integrated sales tax, registration and dealer fee application programming interface (API) to complement its CarletonCalcs solution.
The company reiterated CarCalcs was designed to be an easy and flexible integration for any platform provider in order to connect and populate dealer administration settings. The application’s ease of use is designed to allow for the seamless onboarding of a dealer and real-time access to registration and dealer fee values. The data returned from the API is delivered in a format easily consumed by the CarletonCalcs payment computation module for the precise calculation of retail sales or leases.
These computations can provide the following:
• Sales tax rates by state, city and county
• Sales tax basis including settings for fees and down payments
• Registration fee based on vehicle information
• Dealer fee default amounts by state, including documentation fees
• Finance company and DMS default computation settings
• Ability to compute payment and deal information in a single call
The CarCalcs sales tax and dealer fee API integrates with the title and registration product from Automotive Titling Corp. (ATC) to generate a comprehensive single data channel delivery service. ATC provides automotive sales tax and registration fees in all 50 states.
“For over two decades, ATC has processed thousands of transactions through DMVs all over the country. This has facilitated our ability to build, catalog and uniquely authenticate the most accurate sales tax and registration fee database in the industry,” ATC president Ken Alley said. “Our authentication process is a full-time focus of our expert team”.
The moves were made in light of the vehicle-buying process shifting to a consumer-driven digital marketplace. As a result, Carleton stressed that dealers and finance companies now need their digital retailing platform to support lending regulations nationwide.
Company leadership insisted the combination of Carleton’s loan and lease payment calculation engine, Carleton’s compliant state-driven dealer fee data base, and ATC’s sales tax and title registration data, has resulted in a comprehensive and accurate payment solution.
“We saw a critical need for additional components to calculate accurate payment computations. This was the impetus for developing CarCalcs. Through our partnership with ATC, we have expanded our calculation offerings to include sales tax and registration fees,” Carleton Matt Ruszkowski president and chief operating officer said.
“We knew we needed a partner with the same level of expertise as our proven calculation services. Partnering with ATC was a logical decision,” Ruszkowski added.
All of the metrics Westlake Technology Holdings shared about its 2018 performance headed in directions that would please just about any executive team or board of directors.
And the company already is aiming for double-digit improvement this year.
The company recently announced its portfolio grew 35 percent in 2018, finishing at an all-time high of $8.33 billion in assets under management. Executives highlighted that core automotive indirect financing originations and a reduction in net loss percentage contributed to this growth.
Westlake said its core indirect financing operations delivered 40.5 percent growth over 2017, while 31-plus-day delinquency dropped by 9.0 percent. The company calculated these reduced delinquencies led in part to a 5.6-percent decline in net losses as a percent of total assets.
Westlake mentioned its 2018 mix of originations continued to move toward a more full-spectrum portfolio, as near-prime and prime credit tiers (defined as contracts with FICO scores of 600 and higher) represented 40.5 percent of 2018 deals.
Westlake Technology Holdings group president Ian Anderson said, “2018’s success was made possible by our outstanding employees, implementation of the latest technology and the commitment to achieving our goals.
“For 2019 we project another strong year with increased growth and market share across all our companies,” Anderson added.
Besides indirect financing, Westlake Financial’s other companies saw tremendous growth as well, including:
— Western Funding ended 2018 with 76.6 percent year-over-year growth, a 12.5-percent reduction in 31-plus-day delinquencies and a 18.4-percent drop in net loss percentage.
— Wilshire Consumer Credit decreased its 31-plus-day delinquency by 17.8 percent with a 13.2-percent drop in net loss percentage.
— Credit Union Leasing of America (CULA) grew 29.5 percent this past year.
— Westlake Flooring Services grew 33.0 percent year-over-year with a 69.5-percent reduction in 1-plus-day delinquency and 79.1-percent drop in net loss percentage.
Furthermore, Westlake’s newest company, Westlake Portfolio Management (WPM), enjoyed strong first-year success with $350 million in portfolio servicing of active and inactive accounts.
Westlake chief financial officer Paul Kerwin said, “2018 was a great year for us, because we increased market share while maintaining profitability.
“We set aggressive goals, and our employees did an amazing job executing the plan,” Kerwin went on to say.
For 2019, Westlake Technology Holdings said it is targeting 20-percent growth over 2018 and expansion of its direct lending platform on LoanCenter.com.
Dealerships interested in learning more about Westlake Financial Services are invited to contact Westlake directly at (888) 893-7937 or online at www.westlakefinancial.com.
AUL Corp. recently promoted one of its managers who has been with the vehicle service contracts administrator for more than a dozen years.
According to a news release, AUL president and chief executive officer Jimmy Atkinson has elevated Deonna Frank to the position of manager of operations and cancellations. In her new role, Frank will report directly to Jose Fleites, the firm’s chief information officer, head of IT, operations and service support, and she will lead the operations, pricing and vision for Ocean, the firm’s proprietary operating system she helped implement.
In her new role, Frank will focus on evaluating procedures and functionality to improve efficiency.
According to Fleites, “Deonna has been part of the AUL family for more than 13 years and has been rising through the ranks due to her intelligence, technical savvy and unique ability to manage complex projects with ease. She was instrumental in the design and development of our new pricing and underwriting system and took the extra step to train other team members in its use.
“Her promotion is well-earned, and we will lean on her skills and experience to make Ocean the best it can be,” Fleites continued.
Frank spent the previous three years as a sales project team leader in the firm’s sales and reinsurance department. Prior to that, she held the positions of sales project coordinator and direct marketing manager.
Frank is a certified scrum product owner (CSPO), certifying her mastery of managing teams responsible for complex projects. AUL noted scrum falls within “agile,” which is the umbrella term for several strategic approaches to getting complex, innovative scopes of work done.
