Capture
- The buyer scans the deal's QR code and photographs their license on their own phone.
- The document is checked for authenticity, not photocopied into the jacket.
Red Flags Rule & ID verification
Verify the buyer before the deal funds. Not after.
- Most compliance tools check for identity red flags after the fact, in an audit.
- DealSafe verifies identity on the deal, while the customer is in the F&I office.
- Your Red Flags program runs itself, and every verification lands in the deal jacket.
Four parts
Four corners of compliance
Verify the buyer before the deal funds. Not after.
Four steps. None of them slow the desk.
Verify
- The buyer confirms identity in the same session. Flagged applicants get out-of-wallet or carrier checks.
- Remote buyers verify before they drive in.
Screen
- Red Flags screening runs on every transaction. OFAC is one click away on any deal.
- No exceptions for the regular customer everyone knows.
Document
- Every check, result and resolution writes to the deal record.
- Your Identity Theft Prevention Program log updates itself.
How a dealership verifies a buyer before the deal funds. The buyer scans the deal's QR code, photographs their license and confirms their identity on their own phone. Red Flags screening runs on the transaction, flagged applicants answer out-of-wallet questions, and every result writes to the deal. Nothing funds until the flags are resolved. The Red Flags guide walks through the full workflow.
46 percent of dealers say verification slows the deal. This check runs on the buyer's phone while F&I builds the menu. Verification adds seconds. A buyback adds weeks.
An audit tells you a bad deal funded. Verification stops it at the desk.
| Audit-only | DealSafe |
|---|---|
| Identity checks live in a deal-jacket audit or a bureau workflow. | Identity verification is a step in the deal itself. |
| The findings arrive after funding. So does the recourse letter. | The buyer verifies on their own phone in about a minute. Flagged deals pause before funding. |
| The store eats the car, the chargeback, or both. | Cleared deals carry the proof in the jacket. |
Experian reports that 45 percent of dealers lose $10,000 to $20,000 on a single fraudulent deal, and that dealers average four fraudulent deals before detection. One stopped deal can pay for a year of DealSafe.
In person or remote, the same record
| In-person deal | Remote deal | |
|---|---|---|
| Identity document | Scanned on the buyer's phone at the desk, checked for authenticity | Scanned on the buyer's phone before they drive in |
| Verification | Device and carrier checks; out-of-wallet questions if flagged | Same checks, completed before anything is signed |
| What stops the deal | Any unresolved red flag or OFAC hit | Any unresolved red flag or OFAC hit |
| What goes in the jacket | License images, verification result, screening result, resolution log | The same record, time-stamped |
Verification runs on the buyer's own phone.
Your salesperson generates a QR code for the deal. The buyer scans it and completes verification, the application and every consent on their own phone, in about two minutes, while your F&I manager works the deal. On submit, the sensitive data locks down to general managers and finance managers only. See Secure Customer Intake for the full flow, the iPad option and the access log.
See Secure Customer Intake · See the Safeguards Rule program · See training & audit support
Related reading: The Red Flags Rule for auto dealers: what it requires and how to run it · How to choose dealer compliance software: a buyer's guide · California's CARS Act and where the credit application fits · Enforcement Watch · All guides and news
The fraud math, stated once.
$3.3B
US lender exposure to synthetic identity fraud at the end of 2024, an all-time high. Auto lending is the most exposed category, about $2 billion of it. (TransUnion)
$10.4B
Estimated auto-lending fraud exposure in 2025, up from $9.2 billion in 2024. (Point Predictive)
60,000
Auto-loan identity theft reports to the FTC in 2024, and still climbing in 2025. (FTC Consumer Sentinel)
44%
Dealers who report facing synthetic identity attempts. (Experian)
We already get red flag alerts from our credit bureau. Is this different?
Yes. Bureau alerts fire at the credit pull and leave the resolution to your staff's judgment. DealSafe verifies the identity itself, before and independent of the bureau pull, and records how each flag was cleared. Screening tells you something might be wrong. Verification tells you who is actually standing in the box.
Does this replace our photocopy of the driver's license?
Yes. A photocopy proves you held a piece of plastic. It does not prove the plastic was real or that the person holding it owns the identity. Document authentication plus identity verification gives you both, and a record a lender's fraud department will accept.
Does DealSafe write our Identity Theft Prevention Program?
Yes. The Red Flags Rule requires a written Identity Theft Prevention Program with four parts: identify the red flags relevant to your store, detect them, respond when they fire, and update the program periodically. If you finance deals or arrange financing, you are a covered creditor; BHPH accounts are covered accounts by design. DealSafe drafts the program for your rooftop, maps each red flag to a detection step in the workflow, logs every response, and prompts the periodic review. When a lender or examiner asks for your ITPP, you export it.
What happens when a check fails?
The deal pauses at the verification step. Your manager gets a clear resolution path: additional verification, manager review, or decline. Every outcome is logged, which is what the Red Flags Rule's "respond" requirement actually demands.
Does it work for remote and online buyers?
Yes. Remote shoppers complete the same verification on their phone before they arrive or before delivery. Same standard, same record.
Will this slow down my deals?
The customer-side step takes about a minute and runs in parallel with your normal F&I workflow. Compare that to the time cost of one funded fraud deal: the recourse process, the unwound paperwork, the unit you may never recover.
Does collecting the application make DealSafe a lender or a credit bureau?
No. DealSafe captures the buyer's consent to a hard credit check and files it to the deal. Your store then initiates the pull through DealSafe on its own 700Credit account, and DealSafe reports the results back into the deal file. We are not a bureau and not a lender. For the full intake flow, the iPad option, and the access log, see Secure Customer Intake.
What should trigger extra verification on a deal?
A license that fails authentication, an address or employer that does not match the credit file, a fraud alert or credit freeze on the report, a Social Security number issued after the applicant's stated birth date, a buyer who will not complete verification on their own phone, or a deal where someone other than the applicant is doing the talking. DealSafe flags the first five automatically; the last one is why staff training is part of the rule.
What records should a dealer keep before funding?
The identity document images, the verification result, the Red Flags and OFAC screening results, the credit report and the application it was compared against, and a note of how any flag was resolved and by whom. DealSafe writes all of them to the deal record, so the file exists without anyone assembling it.
See verification run on a real deal.
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