Someone Stole Your Identity And Bought A Car

Always wanted to own a Mercedes? Maybe you do and just don't know it.

The National Insurance Crime Bureau (NICB) warns that thieves are using stolen identities to lease or buy new vehicles, drive them off the lot, then disappear without making a payment. Often the cars are exported to other parts of the world, says Frank Scafidi, spokesman for the NICB.

If you're the identity theft victim who just had a vehicle purchased in your name, "the big problem is unscrewing the situation," Scafidi says. "Once you can demonstrate it (the car) is not yours, the banks will eat it or recoup it if it's found somewhere."

This type of crime has caught the attention of the FBI, as well as NICB. In May, the U.S. Attorney's Office in San Diego charged three men in an international auto theft ring. The trio used stolen identities and stolen credit card numbers to purchase 44 vehicles worth more than $500,000, and ship them to Ghana.

The three had purchased stolen credit card numbers and corresponding counterfeit driver's licenses online. They used that information to purchase cars from U.S. dealerships, stocking up on Toyotas and Mercedes. The cars were transported to New Jersey, then shipped to Ghana, where they were sold.

The scam came to an end when a dealership became suspicious and contacted the FBI.

It's fraud, not auto theft

Scafidi says it's impossible to say how many similar cases have occurred in the United States in the past few years because they're classified as financial fraud rather than auto theft. The FBI tracks annual auto thefts under its Uniform Crime Reporting Program.

These types of cases will catch the attention of the banks that have financed these vehicles when no payments are made on the loans, Scafidi says. The financial institutions typically turn to law enforcement for assistance, and if they try to repossess the vehicles and can't find them, they may contact the NICB.

If you're one of the innocent victims who has had both your credit card number and your identity swiped, you could be in for a wild ride as you try to clear your name.

"Identity theft is really more of a hassle trying to get the record straightened out," Scafidi says.

Despite the headaches, you won't have a black mark on your auto insurance record from failing to cover a car you never knew you owned, says Lynne McChristian, Florida representative for the Insurance Information Institute.

"Identity theft crime victims won't have an insurance obligation associated with a scam involving a car they didn't own or rent," McChristian says.

When you're purchasing a new vehicle, you're supposed to have proof that you have the necessary auto insurance already in place. (See " How to insure a brand-new car.")

"Reputable auto dealers do not let a new car owner leave the dealership without insurance coverage," McChristian says, "so that very first contact with the insurance company may work as a fail-safe step."

It's your identity that's wrecked

If you find out a car has been bought in your name, it will be up to you to clean up the mess.

"The victim will have to prove that it wasn't them," says Eva Velasquez, president and CEO of the Identity Theft Resource Center.

If you receive an unexpected call from a car dealership or finance company asking about the vehicle, you should request a copy of your credit report to see if there are any unauthorized charges, Velasquez says. (See " How to spot identity theft.")

If so, you'll need to file a police report. Then you can expect to have to deal with a host of organizations, including your state's department of motor vehicles, the auto dealership, your auto insurance company and the three main credit reporting agencies, she says.

A situation such as this can have a major impact on your finances, particularly if you really do need to a buy a new car, Velasquez says. Until identity theft issues are resolved, having the extra vehicle listed in your name can impact your debt-to-income ratio and make it appear that you've skipped out on making your car payments.

Velasquez says of the fraudsters, "they're really clever and they can build some really convincing documents."

Often, identity thieves will use your information to run up a few hundred or a few thousand dollars in credit card charges, she says, rather than trying to score vehicles that can costs tens of thousands of dollars. Buying a vehicle in someone else's name is a "new and creative way for thieves to monetize our data."

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