Synthetic Fraud – Building Fake Bot People to Perpetrate Fraud
Transcript
Ken : Synthetic fraud is different. It’s actually a built identity with a couple of pieces of stolen information that don’t go back and the original consumer. Fraudsters build synthetic identity. And, you know, most, I don’t know if most people are aware, but if I put a name and address a social security number in and I say, Okay, give me this, this person’s credit report, if that information doesn’t align with what’s at the Credit Bureau, and create a file at the credit, so that’s how they go about building that synthetic identities, they create that file at the credit bureau. And so that’s different from what we’re talking about here. But it’s still a major thing that dealers need to be aware of, if they don’t have synthetic fraud protection inside their dealership, now we recommend it, I would say about 70% of our new dealers that we sign up, have put some type of synthetic fraud identification in place,n
nKelly : it’s kind of a build-a-bot, you know, it’s a completely different reality. Building a person that doesn’t really even exist.n
nKen : And they they’re patient, they’ll wait 18 months to two years, before they do what they call the breakout. That’s what’s called breakout cash out. But when they just build up their credit, build it up, then they go in and buy major purchases at the end of that breakout. A bust out, it’s called a bust-out at the end of the eight months, two years. n
nAnd that’s the danger to dealerships because when they’re ready to walk away, they built up this synthetic identity and they’ve created credit lines, they’ll start buying things. And you know, in a week’s time frame, they’ll buy things and then they go after the major purchases, they go after dealership purchases, or we have a synthetic fraud protection product in place. And it’s caught fraudsters trying to buy cars, and a couple of times when the fraudsters trying to buy a car, he’s got three other ones that he just bought, with that same identity down the road in a parking lot, and they’ll grab him and they’ll find the other vehicles that he just recently purchased with that synthetic identity. n
nSo it’s that the danger to dealers is because they’re getting taken right at the time of the exit plan and the guy disappears with all the stolen merchandise in the dealer. Depending on this, the dealers are often responsible for that car, right?. You got to pay for that. That’s your loss now, not ours, not the lenders.n
nKelly : Well, look, it’s risky business these days. The bad guys are always one step ahead. Right?n
nKen : That’s always you know, I always compared to radar detectors, right? They come out with a radar detector and the police would come out with a new band or something that the old radar detector didn’t pick up. So the new radar detector is back and forth, back and forth. By the time you bought a radar detector it was out of date. Three months later, because the fraudsters, the police had increased their technology to come out with a way to bypass the detectors. nn
nKelly : it’s kind of a build-a-bot, you know, it’s a completely different reality. Building a person that doesn’t really even exist.n
nKen : And they they’re patient, they’ll wait 18 months to two years, before they do what they call the breakout. That’s what’s called breakout cash out. But when they just build up their credit, build it up, then they go in and buy major purchases at the end of that breakout. A bust out, it’s called a bust-out at the end of the eight months, two years. n
nAnd that’s the danger to dealerships because when they’re ready to walk away, they built up this synthetic identity and they’ve created credit lines, they’ll start buying things. And you know, in a week’s time frame, they’ll buy things and then they go after the major purchases, they go after dealership purchases, or we have a synthetic fraud protection product in place. And it’s caught fraudsters trying to buy cars, and a couple of times when the fraudsters trying to buy a car, he’s got three other ones that he just bought, with that same identity down the road in a parking lot, and they’ll grab him and they’ll find the other vehicles that he just recently purchased with that synthetic identity. n
nSo it’s that the danger to dealers is because they’re getting taken right at the time of the exit plan and the guy disappears with all the stolen merchandise in the dealer. Depending on this, the dealers are often responsible for that car, right?. You got to pay for that. That’s your loss now, not ours, not the lenders.n
nKelly : Well, look, it’s risky business these days. The bad guys are always one step ahead. Right?n
nKen : That’s always you know, I always compared to radar detectors, right? They come out with a radar detector and the police would come out with a new band or something that the old radar detector didn’t pick up. So the new radar detector is back and forth, back and forth. By the time you bought a radar detector it was out of date. Three months later, because the fraudsters, the police had increased their technology to come out with a way to bypass the detectors. nn