AAMVA established the Abandoned Vehicle and Mechanic’s Lien Fraud Prevention Working Group to identify and provide recommendations; to research current laws, rules, and policies for the titling, registering, and investigating of abandoned and mechanic’s lien vehicles; to determine membership needs and concerns; and to conduct research with technical advisors in related fields to determine issues, vulnerabilities, and concerns.
The processing of vehicle titles for abandoned and mechanic’s lien vehicles by motor vehicle agencies (MVAs) is an important responsibility, but unfortunately, it can be taken advantage of by individuals seeking to obtain financial benefits by deception. These vehicles can be nuisances to communities and consume considerable resources by those seeking to dispose of them. They may also contain undisclosed prior damage, which places future purchasers at increased risk to their safety when operating these vehicles. It’s important for jurisdictions to have processes and procedures in place that allow these vehicles to be disposed of in an efficient manner but that also deter fraudulent activity. There are many terms used to reference this activity, but for the purposes of this document, the term mechanic’s lien encompasses all types of possessory liens.
Applicants who seek to title mechanic’s lien vehicles do not typically possess properly assigned titles. MVAs rely on specific laws, rules, and policies for processing the applications, many times trusting the word and statements of the applicant without taking steps to validate the information provided. In many cases, these laws, rules, and policies were written well before current technological advancements, providing opportunities for fraud. Many of the current processes require the use of paper and other outdated means of communications. Updating these laws, rules, and policies to take advantage of advancements in electronic communication would support efficiencies in titling processes and efficiencies for regulatory agencies and industry stakeholders.
Jurisdictions process numerous mechanic’s lien vehicle applications annually. When review practices are limited, only a small percentage of applications are found to be fraudulent, but a closer review of these processes may reveal a more significant number as revealed by investigations and stakeholders. This results in a substantial impact to consumers, industry, and MVA resources. Jurisdictions report that these processes are sometimes abused by those who use them to obtain an ownership document. In some cases, the mechanic’s lien process is simpler than the process for obtaining a duplicate or replacement title. While conducting investigations involving suspected fraud in these applications, law enforcement and MVA investigators may be challenged by the lack of information in the title application as well as inadequate laws relating to enforcement, making successful investigations and prosecution difficult. This may also result in vehicles being operated on the highway with undisclosed and unrepaired damage or cloned stolen vehicles being undetected.
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The processing of vehicle titles for abandoned and mechanic’s lien vehicles by motor vehicle agencies (MVAs) is an important responsibility, but unfortunately, it can be taken advantage of by individuals seeking to obtain financial benefits by deception. These vehicles can be nuisances to communities and consume considerable resources by those seeking to dispose of them. They may also contain undisclosed prior damage, which places future purchasers at increased risk to their safety when operating these vehicles. It’s important for jurisdictions to have processes and procedures in place that allow these vehicles to be disposed of in an efficient manner but that also deter fraudulent activity. There are many terms used to reference this activity, but for the purposes of this document, the term mechanic’s lien encompasses all types of possessory liens.
Applicants who seek to title mechanic’s lien vehicles do not typically possess properly assigned titles. MVAs rely on specific laws, rules, and policies for processing the applications, many times trusting the word and statements of the applicant without taking steps to validate the information provided. In many cases, these laws, rules, and policies were written well before current technological advancements, providing opportunities for fraud. Many of the current processes require the use of paper and other outdated means of communications. Updating these laws, rules, and policies to take advantage of advancements in electronic communication would support efficiencies in titling processes and efficiencies for regulatory agencies and industry stakeholders.
Jurisdictions process numerous mechanic’s lien vehicle applications annually. When review practices are limited, only a small percentage of applications are found to be fraudulent, but a closer review of these processes may reveal a more significant number as revealed by investigations and stakeholders. This results in a substantial impact to consumers, industry, and MVA resources. Jurisdictions report that these processes are sometimes abused by those who use them to obtain an ownership document. In some cases, the mechanic’s lien process is simpler than the process for obtaining a duplicate or replacement title. While conducting investigations involving suspected fraud in these applications, law enforcement and MVA investigators may be challenged by the lack of information in the title application as well as inadequate laws relating to enforcement, making successful investigations and prosecution difficult. This may also result in vehicles being operated on the highway with undisclosed and unrepaired damage or cloned stolen vehicles being undetected.