Communication and shared information are key to fighting fraud

Kristi Mercier, COO of ThunderRoad Financial

SAN DIEGO — To better fight fraud in the powersports industry, lenders and dealers need to have open communication to share information about potentially fraudulent deals, Kristi Mercier, chief operating officer at ThunderRoad Financial, told attendees during the “Best Practices for Finance Excellence” presentation at Powersports Finance Summit.

“We’re all going to get hit with fraud,” Mercier said. “It’s just a matter of time or a matter of how it’s done. There are rings where they dismantle bikes, ship them overseas and try to get them out of the country or they dismantle them, switch the VINs and sell them on the black market. It’s extremely important to train dealers to look for red flags.”

One potential area to train dealers to check — which could signal fraud but doesn’t get a lot of attention — is the Medicare line in a fraudulent paystub. “Fraudsters always seem to fail with Medicare because it’s something that they don’t think the lenders are going to look at,” Mercier explained. “So it’s an interesting trigger point because it’s one of the few fields that anyone really looks at nowadays.”

Lenders and dealers also can look out for father and son fraudsters, in which the father uses the son’s Social Security Number and date of birth on the application. Lenders also should check for elder abuse, such as a 96-year-old attempting to get a loan for a powersports vehicle.

Communication between lenders and dealers — even between other lenders — is a key aspect of stopping fraud. For lenders, one bad contract has the opportunity to hit them all, so it’s important to share new types of fraud or identity theft cases, Mercier advised.

“It all starts with the partnership with your dealership,” Mercier explained. “For example, if the lenders can see a Mercedes, a Toyota, a boat, usually a Harley [on an application] and they’re all within the same day, it’s probably a fraudulent deal. The dealer can’t see that, so it works both ways. We’ve had an incident where we had gotten advice from another dealership that this person was using false identification and paystubs. We actually called our dealer and said, ‘Hey, FYI, this guy is wanted,’ and they called the sheriff and got him picked up. It all starts with the partnership with your fellow lenders, your dealers and your customers.”

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