Beware Improper Mechanics Lien Release Scams

Acquiring a title for your vehicle can sometimes be a challenging process, especially when faced with improper paperwork or existing liens. However, caution is advised against resorting to shortcut methods that may lead to legal trouble. In this blog post, we explore a deceitful scheme known as lien stripping or lien release fraud, shedding light on its consequences and emphasizing the importance of legitimate avenues for obtaining a lien release.

The Perils of Lien Stripping

Lien stripping, also referred to as lien release fraud, is a deceptive practice that has plagued the realm of vehicle ownership for years. This fraudulent scheme often involves companies attempting to obtain lien releases through illegitimate means, putting both vehicle owners and unsuspecting buyers at risk.

A History of Fraudulent Schemes

Instances of lien stripping have been documented as early as 1998, with notable cases surfacing, such as a significant incident in San Antonio in 2004. The pattern continues, as evidenced by a recent case where a company engaged in illegally stripping liens from 100 cars faced federal prosecution. The U.S. Attorney’s Office and the Department of Justice handled the case, leading to convictions on all charges and substantial jail time for the perpetrators.

The Mechanics Behind Lien Stripping

Lien stripping often involves exploiting a legitimate process designed for licensed PRI (Public Regulated Industry) vehicle facilities, including repair shops, dealerships, towing companies, and body shops. These entities can execute a lawful process known as a mechanics lien, wherein a vehicle brought in for repairs can be auctioned off if the owner fails to settle the bill.

However, fraudulent lien strippers fabricate mechanics liens, creating counterfeit paperwork that suggests a vehicle was brought in for repairs and subsequently auctioned due to non-payment. The fake auction results in the vehicle being transferred to the fraudsters or their associates, creating a false trail of ownership.

Pitfalls of Fraudulent Mechanics Liens

The deception doesn’t last long, given the stringent regulations and audits imposed on mechanics liens by the DMV, titling authorities, and federal agencies. Authorities can quickly identify fraudulent mechanics liens, as they scrutinize the authenticity of the documents. In the recent case, the convicted company targeted individuals with financial distress, enticing them to surrender their vehicles through dubious methods.

Safeguarding Against Fraudulent Title Schemes

As a vehicle owner or buyer, navigating the landscape of title acquisition requires diligence and awareness. Here are essential steps to safeguard against fraudulent title schemes:

1. Verify Legitimate Channels

Ensure that any process involved in obtaining a lien release follows proper channels and adheres to legal requirements. Avoid engaging with companies or individuals offering shortcut methods that may lead to legal consequences.

2. Exercise Due Diligence

If you find yourself in need of a lien release, conduct thorough research on legitimate avenues and seek legal advice if necessary. Understand the proper procedures and documentation required to secure a lien release without resorting to fraudulent practices.

3. Be Wary of Unrealistic Promises

Fraudulent entities often make unrealistic promises, such as offering a “free bankruptcy program” to financially distressed individuals. Be cautious of such offers and thoroughly vet any company or individual involved in the lien release process.

4. Report Suspicious Activities

If you come across any suspicious or potentially fraudulent activities related to lien stripping or title schemes, report them to local law enforcement or relevant authorities promptly.

While the temptation to seek quick solutions for obtaining a vehicle title may arise, the risks associated with fraudulent lien stripping far outweigh the benefits. Legal consequences, revoked titles, fines, and imprisonment await those involved in such schemes. As we navigate the intricacies of vehicle ownership, let’s prioritize lawful methods and stay vigilant against the perils of fraudulent title practices.

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