How to Prevent Employee Theft at Car Dealerships

Neighborhood car dealerships are often a victim of theft in many formats. For Lauth Investigations investigators there appears to be an uptick in handling these cases. Employee theft is common in general, with 50 billion dollars lost annually to employee theft in the U.S., but it is especially common with auto dealers due to the access employees have to vehicles and the high value of the product.

Employee theft is something dealers need to be constantly vigilant about. With merchandise going on and off site on a regular basis and with keys switching hands frequently, actual physical theft of a vehicle is common. If it’s not an issue of physically stealing the car, it’s a question of an employee tampering with invoices and checks. Whatever the strategy, car dealerships are losing big time to employee theft, which is a compounding problem since outside theft is already such a big issue for dealerships in the first place.

This week’s blog offers tips for dealers looking to prevent inside theft from their dealerships, with tips on how to handle it if you suspect something.

You need to have a good security system- This is a non-negotiable. Video surveillance at your dealership should be one of your top investments. There are a lot of good options out there including high quality video that focuses on internal processes and is meant to be used in the case of an investigation. Basically, you want a security system that is going to not just scare your employees into behaving, but that is also advanced and clear enough video to act as official evidence if you need it. Security goes beyond video as well. Whether you decide to invest in physical guards, or rely on keeping your facilities locked and changing codes frequently, make sure your security is as personalized as it gets. If you have guards, make sure they know all of your employees by name. If you have smart technology locks, make sure they have voice recognition or thumbprint recognition so that your employees are always identified. Of course money is an issue when investing in security and these options are not always possible, so we suggest at the very least making security a part of the company culture and conversation so that your employees know that they are being watched.

Nobody should have too much control- One of the most common ways that employee theft occurs is that somebody you trust is given too much freedom and control. We see this over and over again, and it feels like the same situation every time. Just because someone has been working for you for years does not mean that they are incapable of betraying your trust, on the contrary, these are the most common cases of employee theft because the employee feels comfortable enough in the environment to begin stealing. Everyone should have some form of check and everyone who handles money should have their books randomly reviewed at different points in the year. Many cases of insider theft are discovered once an employee goes on vacation and a new employee discovers a discrepancy that leads to an investigation.

Take discrepancies seriously- When anything in your bookkeeping doesn’t match up, it needs to be investigated immediately. If you have the least bit of suspicion that something might be going on, invest the time and energy into getting to the bottom of it. We see too many cases where proof of theft appeared early on but it was written off as mistakes in bookkeeping. Hiring a private investigator to research such discrepancies will set you back a couple of thousand. Being victim to employee fraud for a few months can cost you tens or hundreds of thousands. Don’t feel paranoid or ridiculous by choosing to play it safe.

Change patterns frequently- The key to avoiding theft, whether it’s inside or outside, is never letting anyone get to comfortable with the way things work. Make sure that the procedure for locking up, exchanging keys, and moving cars stays air tight, but also changes every few months. This will keep both employees, and outside observers, unable to take months strategizing how to steal from you.

Conduct thorough background checks- This seems like a no-brainer, but a surprising amount of dealerships do not conduct thorough background checks of potential employees. Just because someone makes a good impression or is a friend of a friend does not mean you don’t need to check into their past before you hire them. Many cases of employee fraud could be prevented by simply being thorough ahead of time.

Now if you are reading this and thinking, “All of this checking and suspicion is horrible for office morale,” you’re not alone. Many business managers need to learn to weigh protecting themselves from theft with creating an environment of culture and trust at the workplace. If you think that it is bad for company morale to have your employee’s feel like they are always being checked on, then frame the checks as a way to protect against accounting mistakes, instead of making references to theft. Also, be as transparent as possible with all other aspects of employee life such as salary, promotions, and rewarding hard work.

No employee can fault you for wanting to protect against theft as long as they are being treated with respect. Implementing these habits into your management will lead to a healthier and more efficient environment for both yourself and your employees.

5 Misconceptions and Limitations of Private Investigators

Mainstream media has done a fantastic job of skewing the public’s view of private investigators to be something that it’s not. Specifically, TV-shows and movies portray private investigators as people who are not bound by the same laws as everyone else. Here are some of the popular misconceptions about private investigators:

Misconceptions about Private Investigators

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  1. Private investigators can’t make arrests.

It is a common perception that private investigators function similarly to the police. However, private investigators are not permitted to make arrests unless they are in a state where a citizen’s arrest is legal. Even then, specific circumstances must be met and it is more probable that a private investigator would contact the police if they felt an arrest was warranted.

  1. They can’t check someone’s financial records.

Private investigators have several tools at their disposal but access to financial records is not one of them. Bank account information falls under private property and cannot be accessed without the appropriate approval from a court.

  1. They can’t tap phone conversations.

This is another instance where a private investigator is bound by the law. Private phone conversations are still protected property and it is illegal for anyone to tap a phone without permission from a court. This also applies to recording any kind of conversation without the subjects being aware.

  1. They put together background reports on people that contain private information.

This misconception is derived from the background reports people purchase online. The information in these reports, however, consist of public information and are usually generated by an automated system. You can often find the same information online yourself without paying a fee for it.

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  1. They can’t access someone’s credit information.

Laws in the United States have made it exceptionally difficult to obtain an individual’s credit information. A private investigator is bound by the same laws and cannot legally obtain someone’s credit information without telling them first.

Now that you know a little more about the misconceptions of private investigators, let’s talk about how they can actually be of help. The advantage of a private investigator is that they can tell you where to find information that will bolster your case. They can also compile useful information that might be difficult to obtain on your own. If you decide to hire a private investigator, be sure to get complete documentation of the services they provide.

Feel you have a case? Feel free to contact us to see how we can help.