2018 GNYADA Membership Directory

WHEN SOMETHING SMELLS PHISHY: STEER CLEAR OF FRAUD

“Phishing” emails, where cybercriminals use a fake identity to coax employees into sharing information or transferring money, are becoming increasingly common. While phishing may seem easy to spot, the practice can be quite manipulative and clever so dealers need to be aware. Consider this scenario: while a dealership’s owner is on vacation, a finance employee receives an urgent email. It appears to be from the dealer principal, as it’s from their email address, contains authentic information regarding the trip, and addresses the employee by name.“I need your help. I need you to wire $20,000 into this account right now. I trust you can handle this for me. Please keep this between you and me for now, and I’ll explain on Tuesday.” This message looks legitimate, so the employee acts quickly. Once the transfer occurs, however, that money is lost forever. The dealership just became the victim of an email spoofing fraud. The nature of the business makes auto dealerships particularly vulnerable: • Dealerships handle a lot of money – Fraudsters aim to intercept one of the larger transactions or access bank account information. • Many dealerships operate like small businesses – Although dealerships handle a lot of inventory, they often have a close, family-like office culture. Because staff is small, there is a lot of trust in one another when handling important information. Dealerships don’t often have the same control processes as larger companies. • Wire transfers – Because you can’t transfer the ownership of a vehicle without a title, most vehicle transfers are conducted via a wire transfer or treasurer’s check, two common targets for fraudsters. While the most common form of industry fraud is through email, Bank of America Merrill Lynch has seen a rise in forged treasury checks in the past year. Once the dealership accepts the check and the car drives off the lot, it’s hard to get the vehicle back. The last way fraudsters are targeting dealerships is through the national automated-clearing house (ACH) system which is used to transfer money, usually in the form of routine payments in an established business relationship. While same-day ACH transactions are good for customer relationships, they can be risky. The quick transfer doesn’t allow much time for the dealership to identify fraudulent transactions or verify account information. Two ways criminals target dealerships through ACH fraud include: • Posing as a third-party vendor – The fraudster will email the dealership asking to change the information in a vendor’s payment profile – for example, the street address or bank routing number. That change can mean that a vendor’s printed check is mailed to the fraudster or payment is deposited into the false account.

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