Has your dealership been a victim of embezzlement or theft? If you’re like more than half of American auto dealerships, you’ve had some theft, perhaps even by one of your own employees. Nobody likes to think their employees are capable of it, but access to cash, knowledge of the dealership’s financial system and family or personal problems can be a tempting mix. (Experts say the usual reasons for theft are the 4 Bs: “bills, booze, bets and bling.”)
The data is courtesy of research by dealership information services provider Reynolds and Reynolds, which found that fifty-one percent of dealers have been victims of employee embezzlement and theft or know someone who has.
“It’s not something that’s openly talked a lot about (in auto retailing), but some employees figure out various ways to commit fraud and embezzlement,” Kasi Edwards, VP of marketing for Reynolds and Reynolds told Wards Auto.
Most dealerships will conduct a yearly audit that (among other things) looks for suspicious activity that could mean someone is dipping into the till or altering accounts for the purpose of fraud. But human audits can go only so far, and it’s easy to miss subtle patterns. Often, the audits are done by people who aren’t familiar with the dealership business, so it’s not easy for them to sniff out unusual financial transactions.
Increasingly, some companies are relying on software solutions with advanced analytics capabilities to look for patterns of theft. These solutions examine both historical and current data and search for deviations from usual or predicted behavior. They continuously monitor user behaviors and calculate risk figures to identify potentially fraudulent purchases, transactions, or access. Dealerships can use these tools to ensure all transactions are legitimate and protect sensitive information for both the business and its customers.
In some cases, just the presence of the fraud detection solution on the business’ computer systems are enough to deter would-be embezzlers. Ensure all employees understand what the software is looking for and choose a solution that puts an icon on every page, indicating the analytics software is active.