Alec Cudworth, Sales Director, Integrity at associate member Aristotle International talks about the heightened risks of identity fraud and theft in the industry and shares some tips on how rental companies can protect their businesses.
In today’s challenging economic climate, the vehicle rental and leasing industry faces heightened risks of fraud and theft. The BVRLA has emphasised the importance of data sharing in prior blogs, among its members to combat these threats effectively.
As travel becomes more common and accessible for business and leisure, the need for vehicle rental increases. As it stands, the industry is expected to grow 9.7% from 2024 to 2030. As the industry grows, so, too, do the risks associated with it. The likelihood of identity fraud with vehicle rentals has grown, making the need for the protection of consumers and rental agencies evident.
Auto distributors are seeing a marked rise in synthetic identity theft; in 2023, the UK saw a 38% rise year-to-year in the rate of synthetic identity fraud, accounting for almost $1.8 billion. While it’s easy to overlook the auto industry when thinking about identity fraud, there are two main ways that criminals use to steal cars and personal data:
- Fake IDs: Fraudsters will often use stolen or fake IDs when applying for a rental. Since the information isn’t accurate, it can be difficult to track the individual who stole the car.
- Synthetic IDs: Unlike fake IDs, synthetic identities are based on a blend of real and fabricated information. This can make it easier to track down someone, but that someone is often the innocent person whose information was stolen.
Once the rental application is processed and accepted, the criminals drive the vehicle off the lot, never to return it. Without accurate personal information, it is difficult to track down the stolen cars. It is estimated that the UK alone has over three million of these synthetic IDs floating around, waiting to cause mayhem for citizens.
Preventing identity theft in the vehicle rental industry boils down to strong identity verification solutions. Here are some tips rental companies can use to protect their businesses:
- Train staff against identity theft: Staff are often the first line of protection against theft for rental companies. When a customer comes in to rent a car, they are often greeted at the door and have their application handled by a sales associate. Having staff knowledgeable about identity theft and trained on what to look for when validating IDs can make all the difference.
- Introduce Know Your Customer (KYC) principles: KYC regulations aren’t just for financial institutions; they can be structuring guidelines for businesses to help establish a systematic approach to dealing with identity fraud.
- Implement identity verification software: Identity verification software goes a step above what any staff member could do for verifying a customer’s information. Whether it’s facial recognition software or cross-referencing their data against global databases and watchlists, software can make your identification process more efficient and accurate.
- Verify documents: Ensuring document validity, whether manually or automatically, is key to preventing theft in the vehicle rental industry. Cross-referencing and validating documents can provide you and your customers with the peace of mind they want when traveling.
As fraudsters continue to find new ways to exploit identity verification gaps, rental companies must stay ahead by adopting proactive security measures. By combining staff training, robust verification processes, and advanced identity solutions, businesses can significantly reduce the risk of fraud while ensuring a seamless experience for legitimate customers. As the industry evolves, staying vigilant and leveraging the right tools will be crucial in protecting both assets and customer trust.
Integrity, a division of Aristotle™, has over two decades of expertise in identity and age verification. Integrity orchestration platform allows for a customised approach to identity verification and a more efficient and effective method of delivering identity solutions, tying standard identity processes to real-time signals to combat deep fakes and dark web identity fraud.
Request a free demo at ID Verification Services - Integrity and a representative will suggest the proper solution to meet your needs.
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