By Jeremiah Smith

DISB’s Enforcement and Investigation staff has received referrals of suspected fraud involving vehicles damaged in previous accidents being sold to buyers who live in the District of Columbia metropolitan area.  Sources of the used vehicles include public auctions, as well as insurance auctions in Maryland, Pennsylvania and Virginia for licensed used car firms and shops buying “salvage” vehicles for parts.

Insurance firms obtain “salvage” titles to dispose of recovered stolen vehicles and collision vehicles at insurance industry auctions. These auctions maintain records on the appraised market value of the vehicle and the actual sale price paid by firms that bid on the vehicle and transfer the prior title. Customers buying used cars may not be aware that the vehicles had extensive damage or were missing parts when sold at auction. Vehicle buyers may be issued temporary license plates valid for 45 days to allow time to obtain proof of insurance coverage and vehicle safety inspections.
 
Vehicle buyers may not be aware of prior theft and collision damages until they apply for insurance coverage or have their vehicles rejected at safety inspections. DISB has access to data that can verify prior vehicle theft and collision claims and help trace the specific identification numbers of vehicles and components from salvage vehicles. There are concerns that damaged vehicles not be repaired using component parts from stolen vehicles and that intact airbags be properly installed in rebuilt vehicles.

Liaison has been developed during investigations of suspect insurance fraud claims with other District agencies including the Metropolitan Police Department Centralized Auto Squad; the Department of Consumer and Regulatory Affairs; Department of Public Works; and the DC Motor Vehicle Department (DMV). 

DISB has reviewed data with DMV relating to used car firms that claimed they had obtained required insurance coverage for obtaining and using DEALER license plates. The DMV Dealer Enforcement Office has advised that revised licensing and enforcement efforts in the last two years have reduced the number of used car firms from 269 to 93 firms that are currently licensed. DISB will be continuing to exchange data with other agencies to improve consumer protection.

For more information, consumers may check DISB’s website at disb.dc.gov or call (202) 727-8000. They may also log on to the National Insurance Crime Bureau’s website at nicb.org to do a VINcheck on a vehicle or contact the Metropolitan Police Department’s centralized auto theft office at (202) 724-1360 or call 311 for assistance.

DISB’s Fraud Investigator Jeremiah Smith in the Enforcement and Investigation Bureau has several years of experience handling fraudulent claims in vehicle theft from previous employment with the National Insurance Crime Bureau.