Fewer than 5% of Motorcycle Dealers Collect a Digital Copy of a Driver's License And Compare Against DMV Records for Verification
FARMINGTON HILLS, Mich., Oct. 16, 2024 /PRNewswire-PRWeb/ -- 700 Credit, LLC, the automotive industry's leading provider of credit reports, compliance solutions, soft pull, and identity verification products, today announced results of an industry-wide survey of motorcycle dealerships that reveals alarming trends in synthetic fraud and vehicle theft, highlighting the urgent need for enhanced security measures across the industry.
The online survey was presented to more than 2,400 motorcycle dealers and dealership executives across the U.S. during September. Among the key findings:
Synthetic Fraud Awareness
- Nearly 60% of dealerships reported familiarity with synthetic fraud, though only 18.7% claimed to understand how synthetic IDs are created. This knowledge gap highlights a critical area for industry education and training.
Vehicle Theft Due to Synthetic Fraud
- A concerning 21.5% of dealerships experienced motorcycle or powersports vehicle theft due to fake identities or synthetic fraud in the past 12 months.
- Of those affected, 80.3% reported losing between 1-5 vehicles, while 19.6% suffered losses of six or more vehicles.
Test Drive Policies
- Dealerships show varied approaches to test drives, with 20.6% allowing unrestricted test drives, 20.6% permitting dealer-accompanied rides, and 18.7% offering loaner motorcycles. This diversity in policies underscores the need for standardized safety measures.
Driver's License Validation
- Only 19.6% of dealerships reported having a driver's license validation solution in place. This low adoption rate of crucial identity verification tools exposes a significant vulnerability in fraud prevention efforts.
- Less than 5% of dealers said they collect a digital copy of the driver's license and compare it against a DMV records database.
Identity Verification Practices
- The survey revealed inconsistent methods for capturing and storing customer driver's license information. 48.6% of dealerships still store physical copies in paper deal jackets, while only 10.3% utilize digital storage solutions.
Financial Impact
- In the past year, 20.6% of dealerships were forced to buy back vehicles from lenders due to fraudulent loan applications.
- Of these, 80.4% had to repurchase between 1-5 vehicles, indicating a substantial financial burden on affected businesses.
Industry Challenges
The motorcycle industry is currently dealing with significant challenges. Recent data indicates that after a surge in sales during the pandemic, the industry is experiencing a normalization period. However, supply chain issues continue to impact inventory levels and sales potential. The industry is also working to attract younger riders as its traditional customer base ages. This shift necessitates new marketing strategies and product offerings.
Along with these broader industry challenges, the survey results underscore the critical need for enhanced security and anti-fraud measures in motorcycle dealerships. Industry leaders are urged to implement robust identity verification systems, driver's license verification resources, improve staff training on fraud detection, and collaborate with financial institutions to mitigate risks. As the motorcycle industry navigates these challenges, a concerted effort to address fraud and adapt to changing market conditions will be important for sustained growth and customer trust.
"While we're excited about the potential for growth and innovation, we must address the rising threat of fraud head-on for motorcycle dealers," said Ken Hill, managing director of 700Credit. "Our survey results are a wake-up call for dealerships across the nation. It's imperative that we invest in robust ID verification systems, implement thorough driver's license validation processes, and secure deal jackets to protect sensitive customer information. The industry must forge strong partnerships with technology providers to develop and implement cutting-edge solutions. By strengthening our defenses against fraud, we not only protect motorcycle businesses but also build trust with customers, paving the way for long-term growth and success in the evolving marketplace."
About 700Credit
700Credit is the automotive industry's leading provider of credit reports, compliance solutions, soft pull products, identity theft, and driver's license authentication platforms. The company's product and service offerings include credit reports, prescreen and pre-qualification platforms, OFAC compliance, Red Flag solutions, 2022 Safeguards protection, Synthetic Fraud Detection, Identity Verification, score disclosure notices, adverse action notices, and mobile and in-store driver's license authentication solutions. For more information about 700Credit, visit http://www.700credit.com.
Media Contact
Susan Burke, 700 Credit, LLC, (616) 240-9853, [email protected], https://www.700credit.com
SOURCE 700 Credit, LLC
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