The auto dealer and the employee were close. They worked together for years. Their families socialized. They went to the same church.
But as it turned out, the employee had been embezzling from the dealership for a long time before the crime was eventually and joltingly discovered. The dealer was hurt financially and emotionally.
Dealership employee theft isn’t so rampant that dealers need to treat every employee as a potential thief. But nor are dealership inside jobs rare.
Fifty-one percent of dealers have been victims of employee embezzlement and theft or know someone who has, said Kasi Edwards, vice president - marketing for dealership information services provider Reynolds and Reynolds, citing auditing research.
“It’s not something that’s openly talked a lot about (in auto retailing), but some employees figure out various ways to commit fraud and embezzlement,” she said.
Among digital crime-fighting tools to prevent it is Reynolds’ new Suspicious Activity Monitoring system.
Reynolds bills it as the only dealership-wide monitoring software that constantly looks for potentially suspicious activity.
Using historical and current data, it “looks for deviations or suspicious behavior and can alert the appropriate person about it,” Edwards said.
Predictive analytics helps drive the system, said Reynolds communication director Tom Schwartz. “You can see anomalies not just in a department but across the entire business.”
Yearly audits won’t necessarily catch deviations from historical information, and CPAs often don’t spot theft because they aren’t familiar enough with dealership systems, according to Reynolds.
Reynolds Vice President Jonathan Strawsburg added, “Some of the people who are really interested in it are CPA organizations. (At the National Automotive Auto Dealers Assn. annual convention and expo in January) we had a number of people come by, look at it and like the idea.”
It runs in concert with Reynolds’ Retail Management Platform, which the company touts as an all-in-one digital system that runs throughout a dealership. Edwards calls it a “single-system approach.”
Schwartz expects auto retailers will receive the Suspicious Activity Monitoring program well. But Reynolds is approaching potential buyers of it in a particular way.