Good news. The Financial Crimes Enforcement Network, part of the U.S. Department of Treasury, reports after a recent study that conscientious automobile dealer staff and finance companies are helping to reduce fraudulent vehicle loans obtained through identity theft. Although suspected cases of identity theft are on the rise since 2004, fraudulent auto loans due to identity theft appear to be declining significantly. The SCE and attributes the significant decline to the new Red Flag Rules of the Fair Credit Reporting Act to deal with identity theft. The study notes that credit card fraud continues to be the biggest problem in terms of identity theft crimes. The full report is available at www.fincen.gov/news_room/nr/html/20101015.html, and it is titled "Identity Theft-Trends, Patterns, and Typologies Reported in Suspicious Activity Reports (SARs) Filed by Depository Institutions."
Category Archives: Fraud
If a car dealer sells you a car but does not give you clear title because of a prior unsatisfied lien or perhaps because the car was a prior stolen vehicle with duplicate VIN (vehicle identification) numbers, you may have a claim for fraud or a breach of warranty. A warrant of title from a dealer cannot be disclaimed with an “as is” type of purchase agreement. The Uniform Commercial Code section 2-312 addresses this issue, as does the Magnuson-Moss act at Chapter 50, Title 15 of the U.S. Code (15 USC 2301, et seq.).
I’m an attorney, not an auto repair shop, so I don’t have specific answers to this issue. I did find a couple of books, though, that talk about signs of a wreck. They are written by Danny Wyatt, who ran a body shop in North Carolina for years. He wrote 2 books on the subject: “Collusion Collision” and “Signs of a Wreck.” You can see more about them at http://csiofnc.com/collisioncollusion-signsofawreck.html. If you are buying a new or used car, it may be worth the look to prevent being tricked by a car salesperson or car dealer that has taken a wreck or salvaged car and fixed it up to look brand new. A few ounces of car fraud prevention may be worth a many more pounds of cure.
If you buy a new car that has 900 or so miles on it, there is a good chance that this car is not new. If the car dealer previously sold this car—that is that another buyer signed a purchase agreement and drove it off the lot—and then the prior buyer gives the car back for any reason, the dealer should then sell this car as a used car. The price differential should be significant. Chances are too that the prior buyer noticed problems with the car, and that may be the reason for the prior buyer returning it. Tell tale signs of a used “new car” tend to be high mileage and problems very early on. Before you consider buying a “new car” with high mileage on it, get representations from the car dealer, preferably in writing, about why the mileage is so high, whether it was ever sold before and strongly consider whether you really want that car for the “new car price.” Generally, a dealer that sells a used car as new is in violation of your consumer rights.