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The Alarming Rise of Car Theft Due to Fraud

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Allie Roberts

Car theft has been a persistent issue for decades, causing significant financial losses and distress for dealerships and car owners alike. However, the rise of vehicle theft resulting from identity fraud in the last year is concerning to say the least. In the year 2023 alone, there have been over 80,000 cars stolen from auto dealerships using this method. This alarming trend has shaken the auto industry, prompting the need for innovation and the use of identity authentication solutions to combat this growing problem.

According to a recent investigation by the Federal Trade Commission (FTC), auto banditry has reached unprecedented levels in the DC-Maryland-Virginia (DMV) area (although several other locations across the USA have experienced an uptick as well). A recent article published by ABC 7 News dives into the tactics used by fraudsters and what methods local dealerships are taking to counteract it.

Criminals are utilizing sophisticated techniques to deceive both financial institutions and auto dealerships, resulting in a surge of stolen vehicles. This includes using stolen or fake IDs, fake paystubs, and more to create a realistic identity of someone who appears to be a valid “natural” person.

Fraudsters use this mix of stolen and fabricated Personal Identifying Information (PII) to open new accounts and secure loans from financial institutions. Once the financing has been secured, they head to the dealer. While there, the fraudster makes their “purchase” and drives off with the vehicle of their choice. Several months later, it becomes apparent that the payments for their loan are not being fulfilled and the individual who supposedly “bought” the car cannot be found.

The repercussions of trickster auto appropriation extend far beyond just the financial losses suffered by individuals. Auto dealerships face significant reputational damage, customer distrust, and increased insurance premiums. The average stolen car from a dealership ends up costing them roughly $100K. This includes not only the original cost of the car (which can easily range from $30,000 to $70,000), but also the substantial time and resources required to recover stolen vehicles. On top of that, every stolen vehicle leads to missed business opportunities and decreased customer trust and satisfaction.


The Game-Changer in Auto Fraud Prevention

In the battle against fraudulent car theft, PALIDIN has emerged as a powerful tool for auto dealerships. PALIDIN is an advanced identity authentication solution that helps prevent fraud at the point of sale. By leveraging cutting-edge technology, PALIDIN verifies customer identities, detects fake documents, and flags suspicious activities in real-time.



PALIDIN works by utilizing automated forensic techniques to authenticate the identity documents presented by customers at auto dealerships. By running the documents against a global database of IDs and conducting various tests, PALIDIN accurately verifies the authenticity of the ID. This helps prevent identity thieves from using forged or counterfeit documents to engage in fraudulent activities at the dealership. PALIDIN offers multiple solutions, such as PALIDIN Desktop, which can be integrated into the front desk buying process for convenient and efficient identity authentication, and PALIDIN WebID, which offers authentication for remote car buyers.


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Benefits of PALIDIN for Auto Dealerships:

  • Enhanced Security: PALIDIN provides an additional layer of security, ensuring that only legitimate customers are granted access to vehicles.
  • Improved Customer Experience: By preventing fraud, PALIDIN helps create a safer environment for customers, enhancing their trust and satisfaction.
  • Cost Savings: Implementing PALIDIN can save auto dealerships substantial financial losses associated with car theft through fraud, including insurance claims and vehicle recovery expenses.
  • Strengthened Reputation: By actively addressing the issue of car theft due to fraud, auto dealerships can build a reputation for prioritizing customer safety and security.

The alarming rise of car theft resulting from fraud poses a significant threat to the auto industry. To combat this growing problem, innovative solutions like PALIDIN have emerged as a game-changer for auto dealerships. By leveraging advanced identity authentication technology, PALIDIN helps prevent fraud, protect customer interests, and safeguard the reputation of the dealership.


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