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Financial Institutions, State Agencies Use Electronic Lien and Title Services to Reduce Fraud


vintek (select to view enlarged photo)

PHILADELPHIA--June 25, 2012: VINtek, a provider of automotive collateral management, electronic lien and title (ELT) services and direct finance processing, announced that financial institutions and departments of motor vehicles (DMV) are leveraging its ELT technology to reduce exposure to fraud associated with paper vehicle titles.

“Before implementing ELT, lienholders and DMV agencies had no way to stop falsified lien release letters”

Paper titles open lenders up to a type of fraud that is increasing across the county falsified lien release letters. Perpetrators download lienholders' logos from the Internet, create fictitious lien release documents, present them to a state motor vehicle agency and claim they have paid off their auto loan and that either they or the lienholder lost the paper title, enabling them to obtain a lien-free paper title from the DMV. As a result, lienholders and state governments are unwitting participants in losses from consumer fraud.

State motor vehicle agencies have leveraged ELT to reduce their chances of unknowingly abetting in this scheme. ELT, which replaces the paper automotive lien with a digital lien, greatly reduces this fraud since there is no paper title for the consumer to lose. In the ELT process, only the lienholder of record can electronically release the lien via a transaction in the ELT system -- the motor vehicle agency will reject any attempted release of lien via a printed letter.

"State Departments of Motor Vehicles that have implemented ELT have realized the fraud deterrent and cost savings of having the lienholder electronically recorded on their database to authenticate unsolicited lien release letters," said Danielle Fagre Arlowe, senior vice president, American Financial Services Association (AFSA). "As falsified lien release letters have become much more prevalent, ELT helps motor vehicle departments detect and prevent this fraudulent behavior, thereby helping all victims of these crimes."

"Before implementing ELT, lienholders and DMV agencies had no way to stop falsified lien release letters," said Larry Highbloom, president of VINtek. "As state governments continue to adopt ELT programs and make this platform available to automotive financiers, we will see a noteworthy reduction in this type of fraud and improved efficiency for DMVs and lenders in the state. Consumers bear the cost of fraud in the pricing of auto loan interest rates. As the exposure to fraud abates through the use of ELT nationwide, consumers and lienholders all benefit."