Techniques for Detecting Title Fraud Schemes

By Keith E. Whann

I.      An Overview of the Most Common Title Fraud Schemes and How They Occur
A.     Salvage vehicles
         1.    The vehicle must be rebuilt to restore it to road worthiness, or be made to appear as such; and
         2.     A corresponding title must be obtained which does not indicate the prior salvage history.
B.     Stolen vehicles
         1.     A title which corresponds to the vehicle must be obtained; or
         2.     The vehicle must be altered to correspond to an already existing title.
C.     Odometer rollbacks
         1.     The vehicle’s odometer reading must be reduced; and
         2.     A title with the reduced odometer reading must be obtained.

II.      Detecting Title Fraud and Title Alteration Schemes
A.     The following are some of the methods used to alter the front of a certificate of title:
          1.     Alter the 10,000 or 100,000 digit of the odometer reading.
          2.     Mutilate, initial, smear, erase, punch holes or staples in the odometer reading, VIN, year, etc.
          3.     Insert a decimal point in the odometer reading.
          4.     Use correction tape to remove information.
          5.     When there is a misaligned odometer reading or other information on the title; add letters to look like a serial or stock number and type in a new odometer reading or desired information.
          6.     Chemically alter the information on the title.
          7.     Alter the previous title number.
          8.     Stencil over typewritten information.
B.      The following are some of the methods used to alter the back of a certificate of title:
          1.     Alter the 10,000 digit or 100,000 digit of the odometer reading.
          2.     Write over the odometer reading, usually with a felt tip pen.
          3.     Scratch out and write in a reduced reading; initial it as if a mistake was made.
          4.     Punch holes or staples in the title and initial the altered information.
          5.     Insert a decimal point in the odometer reading.
          6.     Use correction tape to remove information.
          7.     When there is a misaligned odometer reading or other information on the title; add letters to look like a serial or stock number and type in a new odometer reading or desired information.
          8.     Chemically alter the title.
          9.     Remove reassignments or other related documents.
          10.   Laminate over alterations or other information on the title.
          11.   Combine two different titles into one.

III.    Title Laundering Schemes
A.      In order to detect if title laundering has occurred, compare and contrast the state titling laws (title states, as opposed to multiple assignment or reassignment states) for the states involved in a vehicle title chain.
B.      Actual title laundering schemes that are frequently utilized.
          1.     Send titlework to a state with different titling procedures or documents.
          2.     Utilize duplicate or replacement titles (often no mileage is recorded on these documents or the mileage or other information is stated "as on original").
          3.     Obtain titles which are easily altered.
          4.     Title vehicles in states with varying titling information or disclosure requirements.
          5.     Run the titlework through a fictitious consumer’s name.
          6.     Run titlework through a license/permit number of a dealer who has recently gone out of business.
NOTE: Pay special attention to any unusual markings on the title or uncommon titling practices.