Investigation Outline for Fraud Cases

By Keith E. Whann

I.     Whether an inquiry from a third party or routine dealership procedures have generated the investigation, obtain all documents and available information concerning the vehicle involved in the subject transaction. Included in this information, to the extent possible, should be the following:
A.     The year, make, model and vehicle identification number (VIN) of the vehicle.
B.     The date of purchase.
C.     The seller’s name, address and telephone number.
D.     The vehicle’s current odometer reading and the odometer reading and disclosures stated when the vehicle was purchased.
E.     Any service or warranty records, to the extent they are available.

II. After obtaining the year, make and VIN of the vehicle, contact the Bureau of Motor Vehicles (BMV) and request a title chain (if available) for the subject vehicle.

III. When you receive the title chain, contact the title departments in the various jurisdictions (assuming the vehicle has been titled there) and request copies of the title work. Be sure to obtain copies of all of the documents which were surrendered, along with the previous certificate of title. (Remember that certified copies will be needed, if they are to be introduced as evidence in a legal proceeding). If a title chain is not available, you will have to construct the title history by working back from the previous title number listed on the certificate of title in your possession.

IV.   Upon receiving the title work, compare these documents to the title chain (watch the transfer dates) to insure there are no gaps and to determine if an out-of-state title is involved and, if so:
A.    Check with the state involved to determine what documents were used to obtain a certificate of title.
B.    Request copies (certified, if needed) of such documents.

V.    When all title work is received, prepare a flow chart of the vehicle’s history and then examine the following things in the title work corresponding to each transfer of the vehicle’s ownership, beginning with the most recent title issued:
A.     For salvage and stolen vehicles cases:
        1.      The current title number.
        2.      The previous title number.
        3.      The year, make, model and VIN.
        4.      Any areas that are marked by alterations or erasures.
        5.      The previous owner/transferor listed.
        6.      The lienholder information listed.

        B.     For odometer rollback cases:
        1.      Odometer reading when the seller obtained the vehicle.
        2.      Odometer reading when the seller transferred the vehicle.
        3.      Any areas that are marred by alterations or erasures.
        4.      The odometer disclosures:

a. Remember that if an odometer is disclosed as being “repaired” or “replaced”, the odometer must be set to the reading before repair or replacement (or if this cannot be done, zero) and a sticker disclosing such activity must be attached to the left door frame of the vehicle.

b. Watch for a previous title disclosing the odometer reading as unreliable or repaired or replaced, and the selling dealer’s title disclosing the reading to be true and accurate.

VI.   Determine the manner by which the seller obtained the subject vehicle from the previous owner. If it was obtained by:
A.    A direct dealer purchase: Continue to work your way back through the title chain, looking at the various things enumerated in section V above.
B.    An auction purchase:
        1.   Contact the seller to determine which auction was used.
        2.   Contact the auction and obtain a copy of the block ticket. Most auctions keep very detailed and accurate records; thus, this is a good source of information. Furthermore, since most auctions physically examine each vehicle and read each VIN and the vehicle’s odometer at the time the vehicle is registered at the sale, this will not only indicate the vehicle’s mileage at the time the vehicle was auctioned, but it will provide you with a benchmark of what the vehicle’s odometer and VIN “actually read” on a particular date.
C.     A trade-in:
         1.   Contact the individual who traded in the vehicle (if possible) and inquire as to the mileage on the vehicle at the time it was traded in.
         2.   Inquire as to where and when the vehicle was serviced. If they can provide you with a name and address or telephone number, contact this place and see if you can obtain copies of the repair orders. Once again, this can provide you with a benchmark of what the vehicle’s odometer and VIN read on a particular date.
         3.   You can ask if any warranty work was performed on the vehicle. If so, attempt to obtain copies of these work orders from the manufacturer.

VII. Continue working your way through all of the title work, (utilizing the “Techniques for Detection” handout to aid you in your analysis). When you have completed your analysis, you should be able to determine whether or not a particular vehicle has been involved in a title fraud scheme.