Four Years to Uncover a Title Fraud Ring?
in Political & Legislative
By: Chris Abeel, Vice President, Corporate & Governmental Affairs

Every so often, a story comes across the wire that just makes you shake your head. In this case, a tale of fraud that is not only easily preventable but would not occur in any state in the nation that has implemented electronic lien and titling (ELT) technology.

Unfortunately, New Jersey is not one of those states.

NJ Attorney General Christopher Porrino recently announced the indictment of five individuals on various first-degree charges for a scheme in which they financed car purchases and then resold the vehicles after fraudulently removing the liens.

The five enterprising individuals, now defendants, apparently purchased or had others purchase vehicles on credit. They then forged letters purporting to be from the lender stating that the loan had been satisfied, and used those letters to get clear titles from the MVC. The vehicles were subsequently flipped for cash, involving at least 25 vehicles over a four-year period “with a total value of well over half a million dollars.”

Who does this hurt the most? Whose pocket did that half a million dollars come out of? The poor consumers who now “own” cars without proper title, and are on the hook for the lien. I doubt the MVC is going to make lenders or unsuspecting consumers whole. And, of course, taxpayers have to pay for the investigation, a trial, and presumably future lodging with the Department of Corrections.

If this doesn’t make the case for ELT, I don’t know what does, and you can bet we’re telling Trenton lawmakers at every turn.

What I find most ironic is that our state regulators are saying all the right things. “This investigation reaffirms the value of motor vehicle documents and the need for the MVC to maintain the security and integrity of its operations,” MVC Chairman and Chief Administrator Raymond Martinez was quoted in the attorney general’s press release announcing the indictments. “Complacency is not an option, which is why we continue to invest in technology, training and internal controls that help us to identify and crack down on criminal activity.” 

The current investment in “technology, training and internal controls” allowed this fraud to run for some four years. So may we respectfully suggest implementing ELT, something we began asking for more than five years ago.   

ELT can significantly reduce if not eliminate altogether this type of fraud. ELT is a closed looped system, meaning only the lienholder can issue a release through the system, and access is controlled by a user authentication protocol. Is it perfect? No. But it sure is a lot harder to beat than simply cutting and pasting a letterhead!

Apart from fraud prevention, ELT benefits consumers who would no longer have to worry about lost titles, or delays in issuing a title, or getting a lien released. ELT benefits lenders because it helps reduce the cost and time associated with paper liens and titles, including filing, handling, mailing, and, perhaps most cumbersome, going physically to MVC offices with batches of paper forms to be processed.

And, ELT can be outsourced and implemented at no extra cost to the state. 

Because the MVC has refused to move forward on an administrative level, we’ve been actively supporting legislation (A1943/S2968) that would mandate ELT and we’re grateful to the sponsors, Senators Joe Vitale (D-19) and Linda Greenstein (D-14), and Assemblymen Craig Coughlin (D-19) and John Wisniewski (D-19), for their support and leadership on this issue.