Auto Fraud Might Be Stopped by the Justice Department Law

In case you happen to be among the unlucky buyers of a second-hand vehicle who has been fooled by canny sellers, there is some good news for you. In the future, incidents like this might not happen as the Department of Justice at Washington has recently emitted final rules to stop auto fraud.

The National Motor Vehicle Title Information System (NMVTIS) rule intends to link motor vehicle agencies in states throughout the country and asks more insurance companies to disclose vehicles that have been totaled in crashes.

The NMVTIS rule is based on a 1992 statute and requires more transparency from the second-hand market. For the moment, canny sellers can hide the vehicle's history acquiring titles outside the state due to the fact that vehicle salvage disclosure laws are inconsistent and incomplete. With the help of NMVTIS, car dealers and buyers will be able to verify title histories and thus, to fight against fraud.

One strong supporter of the rule is the National Automobile Dealers Association (NADA) which also targets a modification of the law so that auto dealers and buyers could spot dangerous salvage vehicles.

"Insurance companies have resisted reporting the vehicle identification numbers (VINs) of all their totaled vehicles to the public for years," said Ivette Rivera, NADA executive director of legislative affairs. "NADA is pleased that the justice department rejected insurer efforts to weaken the NMVTIS rule. "A public-private partnership that combines NMVTIS with the technological expertise of private sector vehicle history report companies would allow anyone buying used cars -- consumers, businesses, dealers, auto auctions, etc. - to more easily identify one of these totaled cars or trucks," Rivera added.

However, it seems that 14 states have decided not to participate in the NMVTIS just yet. California has already reported it doesn't agree that NMVTIS allows the release of data to customers.

"Unfortunately many states are reluctant to provide their total-loss information to the NMVTIS database, which is why legislation is still needed," Rivera added.
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