More Dealer Title Fraud, This Time in Utah

The Herald Journal has an excellent write up* of another case of auto dealers accused of failing to pay off loans and properly recording vehicles. They include a good summary of the consequences for car owners:

The suspects are also accused of not paying off existing loans on trade-in vehicles. Roberts said the Campbells were falsely representing that they were paying off loans from trade-in vehicles.

“The finance companies were paying the money but it was not going to pay off the loans,” he said. “So the person who did a trade-in would have not one problem but two problems. The first problem is that their bank or finance company still wants money for the (traded) car, the second problem is they have a vehicle that they do not have title to so if they wanted to sell it, they could not.”

This is similar to other title fraud situations we've reported on previously here and here and one of the reasons we encourage lenders to use ELT.

The state of Utah does offer an Electronic Lien Transfer program. Because the program is currently administered solely by the state, DDI is currently unable to link Premier eTitleLien™ to Utah. Stay tuned...

* 1/29/2010: Former auto salesmen charged

Image: Sad Car :( by Félix Adorno

Changes Caused by Electronic Liens and Titles

Participating in a Electronic Liens and Titles (ELT) program (offered by several states) changes the way titles are managed, but not in the way most people expect. The biggest example of this is the title application (application + old title + fee + whatever other forms required by the state). Most people on hearing that an electronic title program is in place assume that the electronic title can be applied for electronically, since logically a "going digital" program means eliminating paper. Sadly, this is not the case with *any* ELT programs so far (mostly*). Title applications must still be submitted with physical owner signatures or limited power of attorney forms.

What ELT Does Not Change

• Liens are still recorded as part of vehicle collateral for loans.
• The lien is still recorded by the DMV.
• Applications for liens are still required (as mentioned above) since physical signatures are required to meet Federal odometer disclosure laws.
• Forms and processes for related actions (owner address change, vehicle reposession, mobile home de-titling, etc.) remain the same.

What ELT Changes

• Lienholders do not receive a paper title.
• Liens must be released electronically (in many ELT states).
• Titles are mailed to owners by the DMV.

Non-Obvious Improvements
I can hear you thinking now: "What good is that? That doesn't help nearly enough!" We've heard that before. This subtle change to a paperless title makes a big difference in business processes, greatly helping lenders, states, and vehicle owners. Titles cannot be misfiled. Owners who misplaced lien-released-on-the-face titles can request duplicates from the DMV. No title mail to open, no titles to mail out.

Premier eTitleLien™ Extras
Our solution allowing lenders to work with state ELT programs helps make the most of these benefits and more. Title applications are tracked until lien is perfected. Information on new electronic titles (owner name, odometer) is checked against the application for accuracy. State title inquiry services are used along with NADA or Blackbook values to verify vehicle status prior to issuing a loan. There's more at http://www.etitlelien.com.

* Ohio does allow lenders to electronically notate a lien for an existing title when no transfer of ownership occurs. Yay Ohio!

Image from Dalit Freedom Network

What to Ask Your DMV to Include in the ELT Program

DDI's Premier eTitleLien™ now works with the Electronic Liens and Titles (ELT) programs in eight states: Florida, Georgia, Louisiana, Ohio, Pennsylvania, South Carolina, Texas, and Virginia. (We're putting the finishing touches on our participation in Arizona, California, and Washington.)

We are dependent on the "features" provided by each state DMV in order to include that feature in Premier eTitleLien™ and make it available to our customers. For example, only about half the states with an ELT program support converting existing paper titles to electronic titles. If they don't offer a feature, we can't offer it either.

And if they don't offer an *important* feature, everybody loses out. Lenders can't (or won't) participate because the program either doesn't work or makes titling harder. Lack of participation means the state sees no cost savings. And vehicle owners miss out on benefits to them.

When we hear that a state is actively investigating ELT (like Nebraska), we want to give them as much information as we can, in the hope that they include all the features lenders, especially in-state lenders, need. We've put together a website (AllAboutTitles.com - a work in progress) that gives some information about ELT, including white papers on

• the value of a title check
• considerations for converting paper titles to electronic
• and our recommendations for what should be part of an ELT program

We also have some technical details about messages and communications, plus relevant legislation affecting ELT programs in each state.

Lenders: Want an easier time managing titles with liens? Want to know what you're missing? Check out our suggestions for what should be included in an electronic liens and titles program. If you're our customer, let us (or our user group) know what you'd like to see implemented. If not and you're in an ELT state, contact your DMV or local lender association (like a banker's association) with your suggestion. Feel free to send them our ideas.

Image: Help is on the way, elevator, Chicago Tribune, Chicago, IL by gruntzooki