What are the risks of a fake title?
A fake title can inflict real pain. Every hour, on average, more than six cars and trucks are stolen in Los Angeles County, by far the riskiest place in California-and one of the worst in the country-to keep a set of wheels parked.
The majority of those vehicles are recovered, but every year about 8,000 owners in Los Angeles County-and about 21,000 statewide-never see their cars or trucks again. Unrecovered vehicles end up in foreign countries, are chopped up for parts, or are "washed"-resold with phony titles. A title is proof of ownership. A lot of people leave a vehicle title in the glove compartment, which is not a wise idea. With a legitimate title, a thief can easily and quickly sell a stolen vehicle, something that would be impossible without a clear title. And, as with counterfeit currency, a fake title leaves the holder hanging out to dry.
Important form of protection
Although vehicle titles are often lost or are rejected for a variety of reasons, some as simple as a signature being written on the wrong line, they are one of the most important forms of consumer protection against being cheated in a used-car deal. Knowing something about titles and vehicle fraud can help you avoid falling victim to a scam artist.
The handling and processing of titles has not changed much in decades. The California Department of Motor Vehicles has experimented with electronic titles, but these are primarily for the convenience of banks and other financial institutions. According to the California DMV, only 215 of the state's 5,000 chartered banks, credit unions and other vehicle-financing institutions use so-called paperless titles, and individual motorists are not allowed to have them.
The paper titles used in California conform to federal guidelines that are intended to make them difficult to counterfeit. Although widely referred to as "pink slips," they are actually multicolor forms embossed with the state seal and imprinted with numerous watermarks that include a grizzly bear. The borders of the form are engraved with finely printed lines that are difficult to duplicate with precision.
Fake titles: not a specific crime
Title fraud is not a specific crime, but it is usually prosecuted by local authorities as grand theft or under laws that forbid the submission of false documents. Even though title fraud is obviously widespread, it is difficult to know exactly by how much.
Private-party vehicle deals are the most likely situations in which people get cheated with fake titles. DMV investigators see a lot of title fraud executed by unlicensed used-car dealers, who often set up in shopping center parking lots.
A couple of precautions could save you the hassle of buying a stolen car with a fake title. Always ask to see the seller's driver's license. It may also be a fake, of course, but it's worth a look and, if he doesn't have one, it's time to look for another car.
When you call a seller, never initially volunteer specific information that you read in the ad. Always say, "I'm calling about your car for sale." If the seller asks "which one" or is hesitant or evasive with the answer, you may be dealing with a "curbstoner" who illegally sells used cars and trucks for a living, or with an unauthorized dealer.
What to watch for
Do not buy a vehicle from an individual who meets you at a location other than a personal residence. Watch to see that the person actually comes out of a residence, since one common scam is for a fraudulent seller to be working on the stolen car in front of a house in which he doesn't live.
Another important step is to demand that the seller has a smog certificate for the vehicle, if it's required by the state, because obtaining a smog certificate requires a legitimate vehicle registration. And, typically, stolen cars with phony titles are offered at unusually low prices to get the deals closed as quickly as possible.
The safest bet is to have both the seller and buyer meet at the DMV. If the seller resists for some evasive reason, that should be a warning.
You can perform your own Vehicle History Report online with AutoCheck. This may save you time, money, and headaches by revealing potential problems before they occur.