Dealership Data Breach Responsibility Can Fall on the Vendor and Possibly Lendor
Transcript
Kelly : Is the responsibility to secure data on the dealership slash vendor alone? Or should the lender also be culpable in the process? Although they too are victimized, what stops my attorney from bludgeoning a lender as well as a dealership? Or prosecuted?n
nKen : Yeah, well, if the lenders, I’ve seen some lenders, you know, making it mandatory that dealers have certain levels of identity tools and fraud tools in the dealership. Still not clear cut, though, right. And it’s, it’s when that transaction between the dealership and the lender happened before or after, but I’ve also heard lenders coming back at the dealerships and say, I don’t care if it happened, you know, you sold that vehicle, you’re responsible. n
nSo now, if if you’re a consumer, and you’ve had your identity stolen, and somebody’s use it to purchase a car, right, that was one of the purposes and red flag regulation, which has done a pretty good job of minimizing identity theft at the dealership, is, you know, that the lender expects the dealer to have that type of protection in place to verify the consumer. You know, a lot of states now are starting to come out with. n
nLike, for instance, I think it’s Michigan. If you have to have your dealership in Michigan, you have to check. I think they have a deadbeat dad type file, like if you have and if you finance a vehicle in Michigan, and that person was on the deadbeat dad file list, you have to pay for that. That’d be dead back support child payments. My god. Yeah, that’s, that’s a reach, right. But it’s, it’s a way to protect that, you know, the mom or dad or on the web, from that person that’s buying a new car, but yet hasn’t made his child support payments, right. So, yeah.n
nKelly : So if I’m an attorney, you’re basically telling me I can go after whoever I want.n
nKen : Yeah, I see. Unfortunately, I see it’s mostly dealerships. So it’s not the lenders. We were involved in a case several years ago, right? There are attorneys who are paying people to go into dealerships that have a 500 score, a 400 score and try to purchase a car from the dealership, obviously, it’s not going to happen. But they want to make sure that that dealership is giving that consumer – their person – a risk based pricing notice or adverse action letter and making sure that the whole process goes smoothly, even though they weren’t turned down. The minute that doesn’t happen, damn class action lawsuit.And they’re calling all the consumers that were turned down for a vehicle in that dealership these last five years, two years, but they’re, they’re calling everybody and they’re asking them to join that class action lawsuit and they’re settling for millions of dollars. So it’s tragic. Yeah. So it’s borderline and entrapment. Is it?n
nKelly : Totally, it is more than borderline predatory entrapment. n
nKen : Yeah. Yeah. n
nKelly : Entrapment is predatory by nature anyway, right?nn
nKen : Yeah, well, if the lenders, I’ve seen some lenders, you know, making it mandatory that dealers have certain levels of identity tools and fraud tools in the dealership. Still not clear cut, though, right. And it’s, it’s when that transaction between the dealership and the lender happened before or after, but I’ve also heard lenders coming back at the dealerships and say, I don’t care if it happened, you know, you sold that vehicle, you’re responsible. n
nSo now, if if you’re a consumer, and you’ve had your identity stolen, and somebody’s use it to purchase a car, right, that was one of the purposes and red flag regulation, which has done a pretty good job of minimizing identity theft at the dealership, is, you know, that the lender expects the dealer to have that type of protection in place to verify the consumer. You know, a lot of states now are starting to come out with. n
nLike, for instance, I think it’s Michigan. If you have to have your dealership in Michigan, you have to check. I think they have a deadbeat dad type file, like if you have and if you finance a vehicle in Michigan, and that person was on the deadbeat dad file list, you have to pay for that. That’d be dead back support child payments. My god. Yeah, that’s, that’s a reach, right. But it’s, it’s a way to protect that, you know, the mom or dad or on the web, from that person that’s buying a new car, but yet hasn’t made his child support payments, right. So, yeah.n
nKelly : So if I’m an attorney, you’re basically telling me I can go after whoever I want.n
nKen : Yeah, I see. Unfortunately, I see it’s mostly dealerships. So it’s not the lenders. We were involved in a case several years ago, right? There are attorneys who are paying people to go into dealerships that have a 500 score, a 400 score and try to purchase a car from the dealership, obviously, it’s not going to happen. But they want to make sure that that dealership is giving that consumer – their person – a risk based pricing notice or adverse action letter and making sure that the whole process goes smoothly, even though they weren’t turned down. The minute that doesn’t happen, damn class action lawsuit.And they’re calling all the consumers that were turned down for a vehicle in that dealership these last five years, two years, but they’re, they’re calling everybody and they’re asking them to join that class action lawsuit and they’re settling for millions of dollars. So it’s tragic. Yeah. So it’s borderline and entrapment. Is it?n
nKelly : Totally, it is more than borderline predatory entrapment. n
nKen : Yeah. Yeah. n
nKelly : Entrapment is predatory by nature anyway, right?nn