In May of 2009 there was an article in the Katy Times about the Harris County Sheriff’s Office looking for two individuals who had defrauded several Houston area car dealerships of nearly $750,000. The two gentlemen in question were obtaining employment at various automobile dealerships in order to obtain customer information. With the information, they financed numerous vehicles. After they were done at one dealership they moved on to another and another.
It is unknown whether the men in question had criminal backgrounds of any kind. With high turnover of employees, it is not unusual for a potential employee to have worked at a number of dealership in the recent past. Given the amount of customer information contained at automobile dealerships, best practices would require that all references and prior employment be checked for each additional employee. In addition, a background check should be done.
Failure to run a background check on new employee hires may be considered failure to use reasonable safeguards in the protection of consumer information. Not only in the automotive industry, but in other industries more and more identity thieves have been obtaining employment for the soul purpose of acquiring valuable customer information. Even if the employee is not being hired for a job that gives them direct access to customer information, dealership employees at all levels probably have some access. Service Department employees have access to customer vehicles which may contain information in them, and routinely obtain credit card numbers and verifications from customers.
Management may worry about the cost of background checks for each and every hire, but the cost of not running the checks could be much higher. Each time a dealership provides a new customer with a privacy statement they are promising the customer in writing that they take reasonable safeguards to protect their consumer information. Reasonable safeguards must include knowing who your employees are and whether of not you have just hired an individual or individuals that have recently ransacked other dealerships. Don’t end up as a headline. Run checks on all your new hires, from porters to the finance manager.
Terry A Dortch is the president of Automotive Compliance Consultants. For more information call 866-301-0593 or visit www.compliantnow.com<.
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