Banks and other auto finance companies have an obligation to report questionable incidents to the U.S. Treasury with a Suspicious Activity Report to the Financial Crimes Enforcement Network.
This could include misrepresentations at a dealership, according to Tom Kline, founder and lead consultant of compliance company Better Vantage Point.
"Common examples of misrepresentations are fraudulent credit applications and adding non-existent vehicle equipment to a bookout sheet," Kline wrote in an email. The latter is also known as "power-booking."
Kline said financial companies must report the date of the activity, a dollar amount and offer a narrative on the suspicious activity.
The lender might also force a dealership to buy back the loan contract of the power-booked vehicle, Kline said.
