• Advanced tools help your dealership reduce leaks and safeguard vital data

By Ken Hill, Managing Director, 700Credit, an MRAA Platinum Partner

In today’s digital age, dealerships have embraced many technological advancements to streamline operations and enhance customer experiences. Among these, the digitalization of Deal Jackets — the comprehensive records that encapsulate every aspect of a vehicle sale, including compliance functions, financing, warranties and customer information.

However, with this shift comes an urgent need to secure these digital deal jackets from individuals with malicious intent. Keeping the digital deal jacket secure not only protects sensitive customer information but also safeguards the reputation and operational integrity of retailers and their partners. However, recent industry analysis shows that many dealers are still not protecting digital deal jackets.

The Importance of Securing Deal Jackets
One of the primary reasons to secure digital deal jackets is to protect sensitive customer information. Deal jackets contain a wealth of personal data, including names, addresses, Social Security numbers, financial details and even copies of driver’s licenses. If this information falls into the wrong hands, it can lead to identity theft, financial fraud and a host of other malicious activities.

Gaps still largely exist in ensuring a secure digital transfer of customer information. A recent industry survey illustrates that roughly 20% of dealership employees say they don’t know what process they have in place for identity verification and that drivers’ licenses are usually processed in the finance office, or that they do not know of a process in place at the dealership. Another 14% of dealer respondents said they do not have a process in place for drivers’ licenses because they have always used the same format but couldn’t cite any specifics of the process.

More alarming is that 42% of dealers using digital deal jackets admitted that they either never include a digital copy of the customer’s driver’s license in the deal jacket, or only very few times, or only some of the time.

Only 6.5% of dealers said they have automated the process of digitally scanning a customer’s driver’s license and then having it automatically placed in the digital deal jacket. Furthermore, scanning of the driver’s license is important, but dealers must also utilize verification technology to validate the driver’s license and the person’s true identity. This additional step helps to validate and verify the individual via address verification, red flag, OFAC, DMV lists and synthetic fraud checks.

Compliance with Legal and Regulatory Requirements
Dealerships are subject to various legal and regulatory requirements concerning data protection. For instance, the Gramm-Leach-Bliley Act (GLBA) and the Safeguards Law mandate that financial institutions, including auto and marine dealerships, protect the confidentiality and security of customers’ nonpublic personal information. Non-compliance can result in hefty fines and legal repercussions. Securing deal jackets helps ensure that dealerships remain compliant with these regulations, avoiding potential legal issues.

Use Of Driver’s License Images for Deal Jackets
The need to digitize deal jackets raises another challenge for many dealers today, who must modernize the way they are capturing and inserting driver’s license images into their deal jackets. In a recent study conducted, we learned:

• 51.2% of dealerships are still making photocopies of driver’s licenses.
• Only 19% of dealers said they collect a digital copy of the license and what is particularly troubling is that in many instances, sales reps at those dealerships are requesting consumers to TEXT them a copy of the license.
• Only 8.6% said they collect a digital copy and also validate the license.
• Most alarmingly, less than one percent of dealers said they collect a digital copy, validate the license and then compare it against DMV records to truly verify the license belongs to an individual.

The Challenges of Securing Deal Jackets
The cybersecurity landscape is constantly evolving, with hackers employing increasingly sophisticated techniques to breach defenses. Dealerships, like many other businesses, face a continuous challenge in keeping up with these evolving threats. The rise of ransomware, phishing attacks and other malicious activities means that dealerships must constantly update and enhance their security measures to stay ahead of cybercriminals.

However, many dealerships, particularly smaller ones, may lack the resources to implement robust cybersecurity measures. Budget constraints, lack of in-house expertise and competing business priorities can make it difficult for dealerships to invest in the necessary technology and personnel to secure deal jackets effectively.

Modern Solutions for Securing Deal Jackets
Integrating new cybersecurity solutions with older systems can be challenging, as legacy systems may not be compatible with modern security protocols. Encryption is a fundamental component of securing digital deal jackets today. By converting sensitive information into unreadable code, encryption ensures that even if data is intercepted, it cannot be accessed without the correct decryption key. Modern encryption techniques, such as Advanced Encryption Standard (AES) and end-to-end encryption, provide robust protection for deal jackets.

Multi-Factor Authentication (MFA)
Multi-factor authentication adds an extra layer of security by requiring users to provide two or more forms of identification before accessing sensitive data. This could include something they know (a password), something they have (a smartphone) and something they are (a fingerprint).

Employees are often the first line of defense against cyber threats. Providing regular cybersecurity training helps ensure that staff are aware of potential risks and know how to respond to them. Training should cover topics such as recognizing phishing emails, using strong passwords and following proper data handling procedures.

With all of this being top-of-mind for dealers, there remains a lot of education needed for the industry. Securing digital deal jackets is vital for retailers, ensuring customer data protection, trust and legal compliance. Modern tools like encryption, multi-factor authentication and regular audits help dealerships safeguard data and thrive in the digital age. Leading retailers understand the need to leverage advanced tools to secure deal jackets to protect the privacy of their customers.

About The Author:
Ken Hill is a Managing Director for 700Credit, a leading provider of credit reports, compliance, soft pull and fraud prevention products. For more information, please visit www.700credit.com.

1: 700Credit industry-wide survey on dealerships and their processes for obtaining copies of the driver’s license; March 2024