Car Criminals Beware

You might remember the headlines; after Hurricane Katrina, truckloads of flooded vehicles were taken out of Louisiana and shipped to other states as far away as the upper Midwest, where they were dried out, cleaned and readied for sale to unsuspecting consumers in states that do not brand flood vehicles. Prospective purchasers of these vehicles were likely unaware that the vehicles had been subjected to a saltwater flood, which made the cars’ electrical systems (including their air bag sensors) more prone to failure, and because of this, consumers were victims of vehicle fraud.

Up until January 30th, it was relatively easy to get away with that crime and with organized auto theft, because individual state licensing systems didn’t really “talk” with each other. Realizing that communication about vehicle fraud was poor, thieves and scammers could move suspect vehicles from state to state with impunity, defrauding the public as they went. But with luck, those days are over.

The U.S. Department of Justice has just announced the availability of an online computer system to help protect consumers from automobile fraud and to provide law enforcement with new tools to investigate fraud, theft and other crimes involving vehicles. The National Motor Vehicle Title Information System (NMVTIS) became available to consumers on January 30, and it will be accessible through third-party, fee-for-service Web sites. The Bureau of Justice Assistance sector of the Office of Justice Programs administers NMVTIS in coordination with the Federal Bureau of Investigation (FBI).

NMVTIS is designed to prevent vehicle histories such as the infamous “Katrina cars” from being “washed” or concealed. It is designed to serve as a national repository of vehicle information. When fully implemented, NMVTIS will have data from every state and will be queried before any state issues a vehicle a new title, making it extremely difficult (if not impossible) to wash, “flood” or “salvage” designations from a vehicle.

The system allows state motor vehicle administrators to verify and exchange titling and vehicle history data, and it provides critical information regarding vehicle histories to law enforcement officials, consumers and others. Consumers now have access to the vehicle's brand history, odometer data and basic vehicle information and can be redirected to the current state of record to access the full title record if available. Law enforcement can track the vehicle's status from state to state by accessing the system directly.

According to the National Insurance Crime Bureau, car theft is a costly business to consumers, generating nearly $8 billion in criminal proceeds each year. Take this recent example: South Florida law enforcement’s “Operation Roadrunner” recovered approximately 250 cloned, stolen vehicles across the U.S. The multistate investigation discovered that a criminal enterprise based in South Florida was stealing vehicles and replacing the VINs on the stolen vehicles with VINs removed from other vehicles of the same make, model and year. These "cloned" vehicles were then used for criminal purposes or sold to unsuspecting consumers. Because the stolen cars and their fraudulent title paperwork displayed legitimate VINs taken from other automobiles, consumers, individual state motor vehicle titling agencies and law enforcement could not detect the vehicles' true stolen status. The criminal enterprise that was taken down in this investigation was linked to many other types of criminal activity, including major violent crimes. This is just the kind of criminal activity NMVTIS is designed to prevent.

Since 1997, the Department of Justice has committed over $15 million to assist states and other stakeholders in the implementation of NMVTIS. Along with implementing this system, the Department has outlined the various responsibilities and reporting requirements for states, auto recyclers, junkyards and salvage yards, and insurance carriers. The Department has also designed the system consistent with federal law, which requires that the system be paid for through user fees and not be dependent on federal funding.

Currently, NMVTIS has the full or partial participation of 36 states. Ultimately, with full participation from all 50 states and the District of Columbia, NMVTIS will prevent stolen motor vehicles, including clones, from entering into interstate commerce; protect states and consumers from fraud; reduce the use of stolen vehicles for illicit purposes, including fundraising for criminal enterprises; and provide consumer protection from unsafe vehicles. In research conducted by the Logistics Management Institute, the system is estimated to save taxpayers between $4 and $11 billion each year. That’s a pretty nice sum of savings for a system that will cost taxpayers not one red cent.