Every avid viewer of TV crime dramas knows that in a missing person investigation, the chances for a police rescue diminish with each passing day, each passing hour. In the car rental industry, the same is true of stolen vehicles. But too often, operators don’t realize a car is stolen until days later. By then, recovery is more difficult because too much time has elapsed before taking action.

When a car is stolen, the sooner law enforcement is notified, the better. The thief may have left evidence or may have been observed by eyewitnesses. What’s more, today’s chop shops operate with such efficiency that a car can be dismantled in a matter of minutes.

“We get a lot of calls from rental car companies,” says Sgt. John Pasquariello of the Los Angeles Police Department.

The most common targets are the top-selling models among the general public.

“There’s lots of commercial theft of those vehicles because of their parts,” Pasquariello says.

“The parts are worth more than the whole,” explains Ed Sparkman, public affairs manager at the National Insurance Crime Bureau. “Selling parts of a vehicle can command a return that’s two to three times greater than what you’d get for the entire vehicle.”

Some thieves, however, sell the entire vehicle after transporting it across state lines or international borders. The vehicle may undergo alterations to obscure its original identity. Criminals can obliterate the vehicle identification number and forge vehicle titles and registration. Sometimes they’ll go a step further and repaint the car or add aftermarket products to change its appearance.

Car cloning is a growing trend. Crafty criminals take a vehicle identification number from one car and place it on a newer one, such as a rental.

But rental operators can dramatically improve their chances of recovering a stolen car if they routinely run and balance their fleet inventory three times a day, says Jim Schalberg, an independent trainer who serves the car rental industry. Moreover, a number of anti-theft products — from GPS-based fleet tracking systems to security cameras — can help thwart would-be thieves.

What’s crucial is that operators take an aggressive approach to car theft prevention, whether the threat is customer conversion or theft from the parking lot.

Take Inventory Regularly
“Every operator should balance inventory when they open, at midday and when they close at night,” Schalberg says. That means running a report on units available and reconciling that against the list of vehicles physically present on the lot.

With leading software programs, such as TSD Rental Management Software and Bluebird Auto Rental Systems, taking inventory is simplified. Using handheld scanners, employees can quickly log in VINs or other barcoded ID numbers from all vehicles on the lot. Then that data can be downloaded into the rental management system to generate an exception report. This identifies which vehicles, if any, are missing. Of course, employees can also compile VINs in the parking lot the old-fashioned way, with pen and paper, to generate an exception report.

TSD’s Marianne Sullivan recommends that at least two employees conduct each fleet audit. One employee should collect the VINs, and another should run the exception report. This rule helps discourage employee theft.

It’s also important to change administrator-level computer passwords on a regular basis, recommends Angela Margolit of Bluebird. In fact, she says, all employees should change their passwords periodically just in case they fall into the wrong hands.

Unfortunately, theft by employees and former employees remains an industry concern. These people are familiar with a location’s routines and procedures and can pinpoint vulnerabilities.[PAGEBREAK]

Control Your Vehicle Keys
Lack of adequate key control is a major contributor to car theft on the lot, particularly at smaller locations without gated exits and security guards.

“You should never leave keys in cars while they’re on the lot,” Schalberg says. “I’ve been to places where they put all the keys in the cars in the morning and take them out of the cars at night when they go home. But if one or two keys are missing at the end of the day, you’re probably going to have a missing car the next morning.”

Operators need to protect keys like they’d protect cash, Schalberg says. When keys are stored out in the open, in plain view of customers, the risk is simply too great. If the counter agent becomes busy or distracted, a skilled thief may be able to grab one or more keys without being noticed.

Problems can also arise when a customer or employee runs inside and leaves a key on the counter while the counter agent is on the phone or busy with another customer. If that key sits on the counter for any length of time, someone could easily palm it without drawing attention.

Each rental location should have a secure key cabinet, Schalberg says. All keys need to be safely locked away each night in case of an after-hours break-in.

For after-hour drops, many locations rely on KeyKeeper, a theft-proof system that allows renters to safely drop their keys and rental contract into a locked compartment that’s inaccessible from the outside.

“It’s like a bank depository,” says Jonathan Weeden, president of Secure Industries, which manufactures KeyKeeper. “It’s made of one-quarter by three-sixteenths-inch plate steel and it’s virtually indestructible.”

Control Parking Lot Access
Theft prevention on the lot also involves controlling the parking area’s points of entry and exit. For large operations, that typically means gated entrances and exit lanes, manned by security guards. The guards can check each customer’s copy of the rental agreement to make sure the driver is a renter and the right car is being driven off the lot.

“We use security guards at LAX [Los Angeles International Airport],” notes Julio Nieves, a former Los Angeles Police detective who is now security manager for Dollar Thrifty Automotive Group’s western region “When a car is rented, some people have the tendency to take the wrong car. They’ll rent a Neon and all of a sudden they’ll get into the 300M. But when they get to the gate, they’re told to go back.”

Tiger teeth can also help prevent unauthorized vehicles from coming and going.

In an effort to curb parking lot theft, the Payless Car Rental airport operation in Denver decided to take measures to discourage even the most brazen thieves.

“We installed barriers around the perimeter, burying posts inside the fence line so that they can’t just drive through the fence,” explains Gene Cunningham, general manager of Payless’ Denver location. “We also block our gates at night with shuttle buses so they can’t just drive through the gate. And the entrance and exit gate is staffed every hour that we’re open.”

The Payless Denver lot is also equipped with four security cameras, focused on the entrance/exit gate, the car wash area, the gas pump and the west side of the lot.

The last time a car was stolen off the lot, the thief gained access by riding the Payless shuttle bus over from the terminal. Management recognized the vulnerability and took action.

“Now our bus drivers must have proof of a contract before the customer can get on the bus,” Cunningham says. “Our operation is at the terminal itself, about seven minutes away from the lot. They’ll give customers a pass, if you will, so that they’re authorized to get on the bus.”

All the preventive measures have worked, Cunningham says. Since installing the barriers, the location has had just one or two thefts off the lot each year.

“It’s all about keeping your ears and eyes open,” Cunningham says. “If your employees see something suspicious and tell you about it, you need to check it out really quickly.” [PAGEBREAK]

Consider Investing in GPS
According to research by Driscoll & Associates, global positioning satellite (GPS) systems have been installed in more than one million fleet vehicles nationwide. AirIQ is a leading provider of this product category in the car rental market.

AirIQ relies on telematics, the wireless transmission of location-based information and control messages to and from vehicles. The system can track, locate and disable rented vehicles that haven’t been returned according to contract.

“Basically, there’s a black box in the vehicle that’s equipped with a GPS receiver, a cellular transceiver and some computing intelligence,” explains Ann Taylor, vice president of sales for AirIQ. “Information is then communicated via the wireless network back to AirIQ Online.”

AirIQ clients access AirIQ Online through a secured password. They can view, at any given time, the position of their fleet vehicle on a digitized map.

Guard Against Identity Fraud
Last year, about 7 million Americans were victims of identity theft, according to a new study by Gartner Inc., a research and consulting firm based in Stamford, Conn. That astounding figure represents more than 3% of the adult population.

According to those who have studied the trend, the problem just keeps expanding. Ironically, publicity about identity theft has helped attract more criminals to the field. Meanwhile, the value of stolen credit card numbers and social security numbers on the black market continues to rise.

At a recent trial in Miami, an admitted identity-theft ring leader, Claude Wilchcombe, testified that he collected stolen credit card numbers by hiring “dumpster jumpers.” They retrieved copies of credit card receipts from the trash bins of rental car companies.

The rise of identity theft has made customer conversion an even greater risk. That’s why it’s more important than ever before to look for the warning signs of identity fraud.

“All the IDs have to match — driver’s license, credit card, passport and any other form of identification,” Schalberg says. “And if they don’t, find out why. There may be a good reason, like a woman just got married or someone just moved. But it’s a red flag when they don’t match.”

Also, it’s a good idea to have counter agents manually key in the last four digits of the number shown on the face of the credit card to make sure they match the last four digits of the number encoded in the magnetic stripe.

“We had some incidents here in Denver where people were actually moving the magnetic stripe from one credit card to another,” Cunningham says. “So the numbers on the front didn’t match up with the numbers on the mag stripe. In our system here, when we swipe the card, the information off the mag stripe displays on the screen. So if the name is John Doe on the front but Jackie Johnson on the mag stripe, obviously there’s something wrong.”

Identico Systems’ True ID is a fraud prevention product that uses multiple tests to detect fake or tampered IDs. True ID is in use at Avis, Alamo and National Car Rental locations.

The product uses a three-step process to validate someone’s identity, says Larry Gilbert, president and CEO of Identico Systems. A digital image is taken of the customer’s driver’s license. The license is tested for authenticity by comparing and matching the information to a national database that determines whether the number has been released or it’s counterfeit. Identico also tests whether the identity itself is valid by running it through a national database that matches the person to current or past addresses, phone numbers and a social security number.

In the final step, information from a national database helps create what Identico refers to as a “smart quiz.” The customer may be asked questions like: What counties have you previously lived in? What streets have you lived on? Which of the following cars is registered under your name — a 1999 Camry, a 2001 Jeep Cherokee or a 1998 Saturn?

Another way to identify identity fraud is to examine IDs under an ultraviolet light.

“Many of our locations use ultraviolet lights at the counter to detect counterfeit money, credit cards and driver’s licenses,” says Jason Logan, staff manager of corporate communications at Dollar Thrifty Automotive Group. “All credit cards have at least one security feature that shows under an ultraviolet light, and new dollar bills have silver strips that appear under the light as well.”[PAGEBREAK]

Today, counter agents need to be trained to spot warning signs of identity theft. The problem is just too prevalent.

“Rental car companies have to make sure they have the right person,” says Mark Plousis, assistant vice president and director of commercial auto at Philadelphia Insurance Co. “With identity theft and organized rings that operate chop shops or stage auto accidents, you need a good defense at the counters.”

The more information rental car companies can gather about customers, the better. Schalberg recommends that counter agents ask for a home address and phone number, work number, cell phone number, emergency contact number and local number and address (if the customer is from out of town).

“The interesting thing about emergency contact numbers is that customers who lie about everything else will often list a valid number of a family member for the emergency contact number,” Schalberg says. He also recommends asking for a social security number, which can be used in skip tracing in the event of a conversion.

Some operators also access state DMV records, either directly from the state or through a third-party provider like TML Information Services. Pricing and availability vary from state to state.

But when gathering such personal data, employees must follow the same procedures for all customers. When agents are inconsistent in what personal data they require of customers, the company is exposing itself to a discrimination lawsuit.

Follow Up on Overdues
The key to preventing conversion is communication with the customer.

“If the customer is supposed to bring the car back on Friday, you should be on the phone on Thursday to make sure the car will be available to rent the next day,” Schalberg says. “That way, you know how many rental days you have available to sell.”

When an operator allows days to pass before contacting the renter of an overdue car, the message sent is that returning the car isn’t all that important; it’s hardly missed.

If the renter is stalling for time because he’s short on cash, the problem keeps growing with every passing day. The debt keeps mounting — and so does the customer’s incentive for keeping the car.

In cases of conversion, operators need to investigate what requirements their local jurisdiction imposes before a case can be handed over to local law enforcement. Because the keys were handed over under the terms of a rental contract, the issue is initially a civil matter, not a criminal one.

“Some jurisdictions make us wait 30 days before we can go ahead and report the car stolen,” Nieves says. “The problem is, someone can strip a car down in 15 minutes.”

When all attempts to contact the renter by phone fail, the next step is to write a letter stating that the customer must return the car by a certain date (depending on jurisdictional requirements).

The letter should be certified, with a return receipt requested, and mailed to the address listed by the customer at the time of the rental. When the deadline passes, the operator can typically go to the police and report the car as either converted or embezzled, Schalberg says. If the police ultimately recover the car, the operator should press charges. Otherwise, local police won’t aggressively investigate such cases in the future.

At Payless in Denver, making calls to overdue customers is part of a manager’s daily routine. Managers will make at least one call a day until the car is returned, Cunningham says.

“We also talk to our competition,” he says. “If we get someone who’s a bad renter, we’ll call our neighbors and warn them. Hopefully, they’ll return the favor.”

Cunningham also adds that his location discovered that conversion incidents fell when rental rates with unlimited mileage were no longer available to local renters. Rates with unlimited mileage are now available to airline-arriving customers only.

“The biggest thing is to work your over-dues,” Cunningham says. “Our procedures have been in place for three or four years now, and we just keep updating them. If somebody throws us a curve we’re not expecting, we try to change our policies and procedures so we don’t get in that situation again.”