The US Salvage Cars Challenge

FRAUDtalks interview:
Christian Wittmann

Salvage cars from the US are always a kind of problem, and the problem is growing. What people do? They buy thousands of cars that are no longer allowed to be sold in the US. This can be because of hurricanes, mayor accidents, in other words total losses so they get the salvage title. Then these cars get shipped to Europe. Most of the times to Latvia, The Netherlands or Finland. Then they get shipped to Lithuania -if not shipped there directly. In Lithuania there are lots of old military bases where people repair the cars with old or stolen parts. This process goes completely under the radar.

Then the cars get shipped to the Western European Market, where they get insured. The car is maybe worth 3, 4 of 5 thousand dollars, and they get sold for 50 or 60 thousand dollars. Because in the eye of the beholder it looks great. But the car is obviously not worth that. Maybe they don’t even have an airbag. We even found cars where a shoe was placed in the airbag compartment instead of the airbag. We even once found a Russian T-shirt in there.

As you can imagine, if you drive with your family you don’t want to have an accident with such car. The same is true for an insurance company. They insure a car which is not road safe and – on top of it- it’s not worth the money. So, if the car gets involved in an accident the carrier has to pay maybe 60.000 dollars although the car is maybe worth only 10.000.

Vin Cloning

Another popular scam nowadays is called Vin Cloning. What people do here is that they could get hold of papers from a car that is actually scraped. The car is no longer there, but they managed to obtain the papers. In some countries it is possible to register a car without any visual inspection at a registration office. People can just go there and the office will provide the paperwork and a license plate. But how to put a license plate on a non-existing car? So what happens is that the carrier receives a call in which the “car” is reported stolen. Now that sounds like easy money doesn’t it? Because the car was scraped and still the “owner” would receive his 60.000 dollars. That is something that we from Carfax protect insurance carriers from.

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