Does ELT Help Prevent Fraud?

Buried in a proposal to states on offering a title check service (on DDI's site to promote ELT programs in US States: AllAboutTitles.com) is a story about how the ELT program helped stop a fraud situation. Reprinted here for your enjoyment (wink).

DDI has feedback from our customer (a lender) about the benefit that the title check program provided in noticing and resolving a dealer fraud situation.

The lender finances a vehicle purchase through a dealer. The vehicle, received as a trade in from a prior purchase, has a prior lien on it. The dealer, instead of using the funds from the lender to pay off the lien, continues to make the loan payments for the prior lien.

An ELT participant, the lender begins to worry as they are alerted that the electronic title has not yet arrived. They use the Title Check program and determine that their lien has not been perfected. After contacting the dealer and receiving his assurances that the process is just waiting on some final paperwork (presumably for the previous lender to relinquish the title and a new title to arrive), the lender decides to wait.

After some additional time (and another use of the Title Check program to verify status is unchanged), the lender decides to contact the previous lender. The previous lender (determined from the “title history” portion of the Title Check) reports that payments continue to be made to their loan. The lender immediately contacts the DMV, stops additional loans through this dealer, and begins prosecution. The dealer is found guilty of fraud and jailed.

The lender was able to keep dealer from obtaining $250,000 in fraud, with 22 titles, losing "only" $50,000 before detecting and terminating the fraud. They attribute the Title Check program with saving the credit union $250,000 in fraud from this dealer.

Reference http://www.charleston.net/news/2008/sep/19/car_scam_investigated55066/.

Is your lender using ELT yet?

UPDATE 1/29/2010: I found out recently that our customer has been able to fully recover the loss, bringing the total prevented/recovered to $300,000.

Image: Bad Car Image

Signing up to be in Pennsylvania ELT

The Pennsylvania Department of Transportation (PennDOT) is requiring anyone wishing to apply for a lien on a vehicle title in Pennsylvania to participate in the Electronic Liens and Titles (ELT) program. Since their program became mandatory (as of July 10, 2008) they have been requiring all lenders (those normally engaged in the business of lending money for automobiles or other titled vehicles) to have an FIN (Financial Institution Number).

The FIN is assigned by PennDOT and must be included on any title application (like the MV-38L). This number is not identical to the IRS assigned FEIN.

Pennsylvania is one of the easiest states to apply to participate in ELT. They do not require a contract or "memorandum or understanding". Just complete their short MV-37 and select a service provider from the list.

My company (Decision Dynamics, Inc.) is (of course) one of the service providers available. For more information about applying with us, please visit http://www.etitlelien.com/ELT.aspx.

Image: Philadelphia skyline from I-95

Two Car Dealers Charged With Loan Fraud

I read a story today about how a dealership had defrauded two banks in Wisconsin. According to the Associated Press, one of the banks was defrauded of 1.7 million dollars over the course of five years.

This kind of theft is inexcusable and needs to be made impossible. Tracking vehicles, VINs, titles and liens should not be a difficult task.

Premier eTitleLien™ is designed to catch (and has) exactly this type of fraud situation. All titles expecting liens are tracked and alerts are made if an electronic title (ELT) is not received when expected. Any available information about a VIN (such as vehicle history) is made available to banks and other lenders.

We are glad that Wisconsin has developed an ELT program and look forward to working with them in the future in an effort to eliminate this kind of fraud.

Department of Justice Press Release.

Same Day Title in South Carolina

The South Carolina DMV has implemented a program to allow vehicle owners to receive a title immediately when paying off a loan. It does require the lender's cooperation, but it is a great feature of the ELT program to have available when trying to sell your car to someone from out of state.

If your lender is part of the Electronic Liens and Titles program, they can submit an "expedited" title request to the DMV. This removes the lien and changes the status on the title to enable you to get an over the counter title at any DMV office.

The beauty of this feature is even if you are standing in the DMV office the lender can issue the expedited release and you can get a title in real time.

Thank you, SC DMV.

Lenders: Convert Your Paper Titles!

As part of their ELT program, several states offer an opportunity to convert your existing paper titles to electronic titles. Some states, such as Virginia, expect this to be a one time process and would like to receive a CD from you. Other states, notably Georgia, make the conversion process extremely simple for lenders. Our product, Premier eTitleLien™, makes converting as easy as possible.

But why would you want to?

1. Keep all your titles in one place. No more drawers.
2. No more misfiled titles.
3. Help reduce fees on printed titles. (Your mileage here will vary.)
4. Let the state mail the title once you release it.
5. Take advantage of specifying an alternate mailing address when releasing the title.
6. On release, Leave the title as an eTitle for the vehicle owner.
7. Take advantage of states that allow an expedited title to be picked up by the owner once you release it.

So convert your titles, and do something else with the paper.