CUNA Mutual Group has issued a risk alert about recent vehicle, or VIN, cloning schemes that have caused loan losses at several credit unions.
Members have been victimized by unknowingly purchasing stolen vehicles funded with credit union loans, according to the risk alert. Authorities seize the stolen vehicles upon discovery and eventually return them to their rightful owners, leaving the member with no vehicle and an unsecured loan — putting the credit union at risk for receiving payments.
Vehicle cloning involves criminals gathering legitimate VINs from legitimately registered vehicles from parking lots, dealerships and even on the streets. They then take a digital photo of the VIN plates under the windshield (some VINs are located on the pillar of the driver’s side doors), then create counterfeit VIN plates for stolen vehicles illegally sold.
According to the risk alert, credit unions should consider the following loss controls:
- check the VIN with the state’s appropriate government agency;
- check the VIN via the National Insurance Crime Bureau’s website;
- utilize a vehicle history report service such as CARFAX or AutoCheck to review vehicle history;
- encourage members to obtain the VIN prior to meeting with the seller so it can be checked across stolen vehicle databases and review ownership documents and check that the VINs match and are not altered;
- educate members purchasing vehicles to check the VIN plate for alterations and inspect engine block-stamped VINs for evidence of grinding or alterations, in addition to encouraging a professional vehicle inspection; and
- review collateral and loan documents such as registration and title records for mismatched information.
CUNA Mutual Group’s risk alerts may be accessed on their Protection Resource Center. Log-in is required.