It didn’t take long for Tricity Auto Group’s subscription to a company specializing in identity fraud detection software to catch someone attempting to purchase a car with another person’s driver’s license.
About two months ago, the B.C. company paid to subscribe to the software offered by Toronto-based Paays Financial Technologies Inc. (Paays), which provides digital identity, income verification, and pre-qualification solutions to automotive dealers and financial sources.
A couple of weeks ago, the Paays ID Verifier solution worked when an individual came into Tricity’s Mitsubishi store in Port Coquitlam attempting to make a purchase and sought financing. The salesperson asked for the individual’s driver’s license, which was scanned on the front and back to match the identity, and then did facial recognition with his cellphone.
It took only a few minutes to determine the individual was not the same person as the one on the driver’s license. The fraudster said he had been battling cancer and that was the reason the photo ID and his face did not match. When asked for additional information, he promptly left.
“I know enough about Paays that even if someone is wearing a hat or shaved off their beard, the system is able to still identify whether that person is the same person,” said Gord Spears, Senior Vice President of Tricity Mitsubishi, in an interview with Canadian auto dealer.
The dealership’s finance manager did a search online and matched the name of the person on the driver’s license. They then reached out to indicate someone was using it to purchase the vehicle. It turned out the license had been lost a month before.
“Am I surprised it worked effectively? No,” said Spears. “I think probably every dealer has had an experience where somebody bought a car who wasn’t who they said they were. Paays gets a 99.9 per cent match. It’s like there’s no chance this was the same person. We do have people come in here with fake driver’s licenses and that is an aspect of why we implemented Paays.”
“That will help us to detect a fraudulent government-issued document, and the other part is to make sure the person who is holding the ID is actually who they say there are,” he added.
Spears said financial lenders are aware of this type of fraud. They rely heavily on the dealers to do their due diligence to prevent someone from using a fake ID to buy a car.
“Once the money’s out, their asset is at risk if they didn’t actually finance this to the right person,” said Spears. “I have already been told by multiple lenders they are very happy to see our investment in a tool like this that helps better protect them and helps improve our Know Your Customer (KYC) process.”
When Paays was launched in October 2022, it indicated that auto financing fraud has grown to a $1 billion a year problem. Paays Founder and CEO David Fry told Canadian auto dealer that because of the increase in fraud, financial lenders are holding dealers’ “feet to the fire” to crack down on it.
“A couple years ago I would say it was just lenders that were pushing this. Now I think it’s both sides that see there is a problem here that’s getting out of control and that they need to do something about it,” said Fry. “I think we’ll see lenders increasingly pushing this kind of solution as well with the dealer partners to protect everybody.”
