In the fast-paced world of car transactions, our sales staff handles an influx of calls, often surpassing a thousand per day. Amidst these calls, we encounter a myriad of tales from individuals seeking titles for their cars. Following the closure of the Vermont loophole earlier this year, the surge in fraudulent activities has been unprecedented. Today, we delve into the shadows of car title fraud, uncovering five distinct types that every cautious buyer should be aware of.
1. Duplicate Title Fraud: One prevalent scheme involves what we term “duplicate title fraud.” Unscrupulous individuals obtain a duplicate title from the DMV by reporting the loss of their original title. With the new title in hand, they secure a loan against the vehicle and sell the original title to an unwitting buyer. When the buyer attempts to transfer the title, they discover it’s outdated, leading to financial loss and legal complications.
2. Fake Mechanics Liens: Another deceitful practice involves fake mechanics liens. Opportunistic individuals fabricate a scenario where a vehicle was allegedly brought to a body shop, bills went unpaid, and a mechanics lien is claimed. Although this process may yield a title after months of waiting, DMVs are now scrutinizing these claims, with many titles at risk of revocation. Body shops implicated in the fraud may face license scrutiny.
3. Title Transfer Fraud: Title transfer fraud emerges when sellers promise to obtain a title for a buyer after a payment, asking the buyer to sign over ownership. This risky transaction leaves the buyer vulnerable to potential legal issues and the uncertainty of whether the seller will uphold their promise. Furthermore, sellers operating without proper licensing may face asset seizure by state authorities.
4. Altered VIN Numbers: Altering Vehicle Identification Numbers (VINs) is a perilous practice, as individuals attempt to replace or modify VINs to obtain a title. However, VINs are securely attached to vehicles, and any tampering is likely to be discovered during inspections. Such alterations can lead to legal consequences, including charges of VIN tampering.
5. Partson Vehicle Scams: Scams involving “Partson” vehicles, sold with a Certificate of Destruction, entice buyers with the challenge of repairing seemingly non-repairable cars. However, these vehicles are designated as non-repairable by insurance companies, rendering them ineligible for title issuance. Buyers attempting to circumvent this designation may find themselves entangled in legal troubles.
6. Fake Lien Releases: In the final scheme, fraudsters forge lien releases from banks to remove existing liens on vehicles. Once detected by the DMV, these releases are invalidated, and legal action may be taken against the perpetrators, often at the federal level by agencies such as the U.S. Secret Service.
As the aftermath of the Vermont loophole unfolds, the surge in title frauds demands vigilance from potential car buyers. The cancellation of the loophole has steered individuals toward legitimate and lawful means of obtaining titles. The message is clear: circumventing the system may lead to severe consequences. In this landscape of evolving scams, knowledge is the buyer’s best defense. Exercise caution, research sellers diligently, and opt for the legal pathways to ensure a smooth and secure transaction, safeguarding both your vehicle and hard-earned money.