[Fraud Trends Series] Trend #5: Vehicle Title Fraud

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Many people work hard to save up to pay cash for their vehicles only to be duped by fake title scams. In an era where online car buying is common, it’s easy for criminals to hide behind websites that make everything look legitimate. (It’s when you look under the hood that you find everything they’re trying to hide.) While all the paperwork might look real during the transaction, you might discover it’s fake when you attempt to change the title to your name. (And by then, it’s too late to get your money back.)

Vehicle title fraud happens when a dealer or private seller issues you a forged or incomplete car title, a state-issued document that proves that you own your car. It can be a physical piece of paper or an electronic document. (The kicker: It’s on the buyer to determine if the title is real or not.) Typically, there are three ways that title fraud is carried out:

  • Title Washing involves either printing a fake title; altering the title to hide the car’s salvage record; or registering a totaled car in a state where the salvage status is not mandatory.
  • Title Jumping occurs when someone buys a vehicle, but it’s not registered in their name before they sell it to someone else. This tactic is used by unlicensed car dealers to avoid paying taxes or other fees.
  • VIN Swapping, Switching, or Cloning is the newest technique used to alter or hide a VIN number of a stolen car.

Titles contain important information like paint color, title issue date, make, model, production year, name of owner and address, an odometer reading, and a Vehicle Identification Number (VIN). It will also list information about the physical state of the car. (If it is “clear,” there is no lien against it. If it is “clean,” the vehicle has not been involved in any large accidents, nor considered totaled. If “rebuilt,” the car previously had a salvage title, but an owner has rebuilt it. If declared “salvage,” the physical condition is severe.)

Some recent examples of vehicle title fraud include:

Marcella Samuels, 44, of Irondequoit, N.Y., was sentenced to two years of probation for creating and selling forged State of Maine vehicle documents to individuals attempting to register their classic cars. She used the U.S. Mail to pay for advertisements that lured individuals to mail payments of $300 to $350 to her in exchange for providing a title. Samuels forged and mailed the documents to the customers and in the process, collected approximately $292,000 in proceeds.

Lashaumba Randolph was sentenced to 60 months in prison for providing fake titles and other bogus vehicle documentation used to defraud car buyers. The scam was part of a national stolen car ring that involved around 60 stolen luxury cars – Ferraris, Lamborghinis, and Corvettes – worth more than $4 million. Randolph is the ninth defendant to be sentenced so far.

So, how can you avoid becoming a victim of vehicle title fraud?

  • Demand to see the car title before signing a contract to purchase the vehicle.
  • Verify the vehicle’s title through the DMV or purchase a vehicle history report. If the information provided by the DMV or car report is different from what’s on the title, it’s probably fraudulent. (Note that title information is public information.)
  • Pay attention to which state issued the title. If it’s from a different state, it might be fraudulent.
  • Check the condition of the title. Is the printing unclear, smudged, or fuzzy? If so, then you should be suspicious.
  • Verify the date when the title was issued. If the vehicle is 10 years old, but the title was issued a few months ago, it’s likely the title is fake.
  • Double-check the vehicle’s mileage and compare the dashboard reading to the title.
  • Review the accident history with a used car report before purchasing.
  • Obtain a free VIN check through National Insurance Crime Bureau.
  • Carefully inspect under the vehicle to look for used or rusted parts. This will help you to determine if the car has been rebuilt or repaired extensively.

One of the best ways to protect yourself from vehicle title fraud is to ask the person who is selling the vehicle to meet you at the DMV or at a police station. If they refuse, don’t sign the contract. (And drive off quickly in the opposite direction!) If you do suspect that your car has a fraudulent title, report it immediately to your local police department, your insurance company, or the National Insurance Crime Bureau.

 

 

 

 

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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.