Fraud is defined as “wrongful or criminal deception intended to result in financial or personal gain”. Wow, that sounds scary!! There must be checks and balances in place in any business to keep the employees honest. Fraud can take on several different forms within a service or parts department. In this article I will be addressing the service department.
Everyone should have his/her own login screen name
When I visit dealerships, it still amazes me the number of stores in which the service advisors all use one login to create repair orders. At times, I find some using a previous employee’s login that hasn’t been deleted. This could allow the employee, depending on his pay plan, to manipulate his numbers to his/her advantage.
Review employee screen access
At times I have found employees have, for whatever reason, received access to parts department screens. Some may have been former parts employees or maybe they have watched a parts employee sign-on to the system. This could allow that person to remove parts from repair orders or even change the price of the parts being sold. Always make sure departed employees’ system access is removed.
Review exception reports daily
I think every DMS system has a method to review repair orders where the “default” setups have been over-ridden during a time frame of your choosing. Reviewing the process daily could identify employees removing or reducing times/prices on a customer ticket before it comes to your dealer/controller’s attention.
Review technician “flags” with repair orders
It doesn’t matter if the repair order is manually or electronically “flagged”, you must have a method to review them daily. Too many times I have seen that this process was not followed and when discovered, we found the employee was no longer employed by the dealership. I have also seen where another dealership employee (who was the one double-checking flagged hours) was in partnership and sharing the additional monies on payday with that employee!!
This area is typically checked at least monthly. You should require it be checked weekly! I cannot tell you how many times I see this report with employee names that, when asked, they say “he said he would pay this next payday when he got his check”. Well here we are 7 months later and the repair order is still “open”.
Recode building keys
Always make sure that building/department keys given to employees have the words “DO NOT DULPICATE” on them. It doesn’t always prevent the keys from being duplicated, but it does throw up another roadblock. It’s always good business practice to recode the department access yearly. We know that locks only keep the honest people out. Your insurance company and the rates you pay will appreciate it.
Restrict building alarm access
Most building alarms can be set to monitor who and what time of day staff enter and exit the building. They can also now be set only to allow access during certain days of the week and hours of the day.
What steps have you taken to reduce F-R-A-U-D in your service department?