The recent Equifax data breach potentially affects car dealers and their customers.

Equifax, one of three nationwide credit-reporting agencies that track and rate consumer financial histories, says the breach compromised information from as many as 143 million people in the U.S.

Given that number and the sensitive type of information exposed, dealers should understand the basics of what happened and what it means for their customers.

In particular, dealership employees should recognize they are likely to:

  • Get questions from customers about the breach.
  • See a potential increase in “credit freezes” and fraud alerts on credit applicants’ credit reports.

If dealership personnel do get questions, it is important to first explain that the reported breach occurred at Equifax and does not involve the dealership, data stored at the dealership or dealership processes. 

Dealership personnel also can point consumers to the Federal Trade Commission’s consumer guidance “The Equifax Data Breach: What to Do?”

That guidance provides:

  • A link to the Equifax website, where consumers can determine if their information is at risk, and how to sign up for the free credit monitoring service provided by Equifax.
  • General information about steps consumers can take to protect their credit, including how to place a fraud alert or credit freeze on their account.

What if dealership personnel do see a fraud alert or encounter a frozen credit report? First, review the FTC’s “Fraud alerts vs. credit freezes: FTC FAQs” that provides further information about fraud alerts and credit freezes.

There, the FTC explains that if a customer’s credit is frozen that person’s credit report generally cannot be viewed until the customer takes steps to unfreeze it.

If there is a fraud alert on the credit report, then the dealership must take certain additional steps to verify the identity of the applicant before the credit process can be finalized. Generally, that involves calling a phone number the consumer provided at the time they placed the fraud alert and speaking with the consumer.

Dealerships should know scammers already are trying to take further advantage of the Equifax breach by calling consumers and trying to obtain personal information through false pretenses.

This breach is a reminder for dealers to revisit their Red Flags programs to ensure they are taking the required steps to detect and prevent scammers from opening a line of credit using someone else’s information.

Mark Scarpelli, 2017 the chairman of the National Automobile Dealers Assn., is president of Raymond Chevrolet and Raymond Kia in Antioch, IL, and co-owner of Ray Chevrolet and Ray Chrysler-Jeep-Dodge-Ram in Fox Lake, IL.