Yamaha Motor Finance Corp. USA has stemmed fraud in its credit card portfolio by teaming up with dealers to spot scams sooner, Chief Risk and Strategy Officer Vijay Patil said at the Auto Finance Risk Summit 2019.
After taking its credit card program in-house in November 2016, Yamaha noticed that fraud was “two to four times higher” than it had been with the captive’s Capital One Financial Corp. card, Patil said. While Yamaha has digital tools and trains its underwriters in fraud prevention, the company turned to its dealer network for extra support. After trying to figure out what part of the country and which sections of the business the fraud was coming from, Yamaha staged a meeting with dealers to learn what they saw in the store.
“We said, ‘This is what we see, how can you help us beat it?'” Patil said. “Because it’s in your best interest as a dealer and our best interest as a captive to make sure that there’s no fraudulent transaction. The more fraud [prevention tactics] we see from the dealership, [the more] useful it’ll be in the future.”
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Additionally, dealers shared tactics they have used to limit fraud, like utilizing a fingerprint machine to verify consumers’ identities. Working directly with dealers on fraud helped the captive to gain better control of the credit card program.
“So you get these multiple levels of questions, answers, and practices that [dealers] are using,” Patil said. “We met them as partners. We said, ‘Okay, there’s a dealer group. How can we make sure that those practices as followed by the rest of the dealers?’ Being a captive, it’s easy because dealers have only one captive and 20 other banks they deal with. So, as a captive, they are more open to partnering with us, and that has really helped us control the fraud.”