TITLE FRAUD HURTS HONEST DEALERS

CONGRESS PASSED THE ANTI-CAR THEFT OF 1992 to counter what is perceived as the No. 1 property crime in the U.S.: car theft.

Currently, The American Association of Motor Vehicle Administrators (AAMVA) works with the Justice Department under a cooperative agreement.

The benefits of this alliance deter trafficking in stolen vehicles by eliminating the ability of thieves to obtain “valid” titles by retitling vehicles in other states.

A copy of the motor vehicle title presented for retitling would be electronically validated against the database of the state that originally issued the title, using data from the General Accounting Office and the National Motor Vehicle Title Information System. A new title from one state would automatically cancel the title in the original state where it was issued.

But it needs the cooperation of all 50 states for the system to really work.

Uniform titling laws are needed. So is greater enforcement.

Fraudulent titles have the potential to damage the reputation of all members of automotive retailing, especially dealers who serve consumers' used-vehicle needs.

A few examples of the potential effects of title tampering are:

When Hurricane Floyd flooded the Southeast last September, it damaged more than 75,000 cars, soaking them in a mixture of water, motor oil, fertilizer and other contaminants.

Even though insurers wrote off the cars as total losses, some will be repaired and sold to unsuspecting customers all over the nation.

Vehicle fraud affects the economy, consumer safety, and most important, in the context of this column, unsuspecting automobile dealers.

With several states employing different standards for retitling and creating convenient loopholes for illegal titling, it's apparent a federal titling law covering all U.S. vehicles would attack the problem.

Vehicle fraud occurs when junked or salvaged vehicles are presented for sale to consumers (unfortunately by unsuspecting dealers) without disclosure of their real condition. Unknowing consumers pay more than the vehicles are worth and don't know if the cars are unsafe to drive.

State titling agencies “brand” titles for junked or salvaged vehicles. However these labels become ineffective when the paper titles travel from state to state creating a process called title washing.

With minimal results, the feasibility of a uniform federal title law has been debated for decades by the NADA board as well as individual state boards.

The problem is that if only a few states don't cooperate, they become a fertile location for illegal titling practices.

The effectiveness of federal intervention in confronting vehicle fraud can be seen by the effects of the odometer law already in place.

It formerly was a common practice to reset odometers. (In fact, a device for turning back odometers was widely marketed to dealers.) But the practice is now almost nonexistent because of federal penalties which include jail time and fines.

The National Motor Vehicle Title Information System is a competent tool for investigating vehicle thefts and fraud. That information is forwarded to law enforcement to follow up.

My contention is that, if they are doing such a fine job gathering information, why not give them title fraud enforcement power similar to that which made the odometer law enforcement so effective?

I would not wish federal government agencies as champions of new-car dealers' rights. However, I welcome their help where consumers are ripped off, and legitimate dealers are then unfairly painted with a broad brush.

Nat Shulman was owner of Best Chevrolet in Hingham, MA for many years.