What Is Title Washing?
Title washing is the act of removing information from a car title by illegal or fraudulent means. Unscrupulous sellers “wash” a title to remove information that could reduce the value of a vehicle, including information about loans (called liens), or title brands, such as salvage titles and rebuilt titles. Title washing can even remove evidence that a vehicle was stolen. The result is a “clean title” that isn’t really clean.
Carfax uses a variety of sources to track and catch instances of title fraud, including title washing. A Carfax Vehicle History Report contains information you can use to avoid being victimized by a title-washing scheme.
Why Is Title Washing a Big Deal?
Victims of title washing usually end up paying much more for a car than it’s worth. Hidden problems, such as accident damage, can expose buyers to safety or reliability issues down the road.
Hides Reliability or Safety Issues
A used car that’s endured a flood or major accident will likely have long-term reliability issues. Flood damage, for instance, can cause corrosion or electrical problems that are difficult to repair. And a significant collision can leave a vehicle with lingering issues that compromise its dependability or safety.
Affects Sale Price
The types of issues hidden by title washing can have a significant impact on a vehicle’s value. A history of severe damage, for example, can knock thousands of dollars off a car’s selling price, so if a fraudster can successfully wash a vehicle’s title to hide that damage, they can sell the car for much more than it’s worth.
How Does Title Washing Work?
Title-washing scams can be executed in different ways. Here are a few:
Moving a Car to a Different State
Title-branding regulations vary from state to state. If a car’s title has been branded in one state, because an insurance company has declared the vehicle a total loss, for instance, it may be possible to remove the brand by simply relocating the car to a state where that brand isn’t recognized or noted.
Altering the Original Title
Some scammers alter the actual title, which is a document issued by a state detailing a vehicle’s owner, its basic information, and any title brands the car may have collected. In some title-washing schemes, the seller makes physical changes to this document to remove any evidence of branding. Fraudulent titles can be difficult to detect without experience.
Applying for a New Title
An unscrupulous seller can simply reapply for a new title without disclosing the car’s history. Laws overseeing title branding rely on a vehicle’s insurer or owner to report damage, so if an owner doesn’t disclose past damage, the title won’t reflect that information.
Is Title Washing Illegal?
Car-title washing is illegal; it’s considered fraud and is typically prosecuted as a federal crime. Depending on the scope of the fraud, an investigation could also involve state and local agencies.
A large anti-fraud operation conducted in 2010, Operation Title Sweep, is one example of major law enforcement action against title washing. A joint operation between the FBI, the Texas Department of Public Safety, the U.S. Postal Service, and a half-dozen other federal and state agencies, the campaign resulted in the prosecution of a number of high-level fraudsters, including one case involving more than 600 cars and $3 million in losses.
Reporting Title-Washing Scams
If you have proof that you’ve been victimized by a title-washing scam, there are agencies you can call for help. At the state level, contact your attorney general or department of consumer affairs. Local law enforcement can also be a resource, and because title washing is a federal crime, the FBI has numerous anti-fraud resources that can help.
How Do You Avoid Title-Washing Scams?
You can steer clear of title-washing scams by not relying solely on a car’s title to give you all the information you need to make a good decision. A Carfax Vehicle History Report contains a lot of information you can use to avoid being victimized. Carfax tracks cars by using their vehicle identification numbers (VIN) and information from many different sources, giving you a complete picture of a used car’s history.
A Carfax Vehicle History Report can tell you if a vehicle has suffered the type of damage that could result in a branded title. This report also includes any smaller accidents the vehicle may have been in, and it provides helpful mileage history you can use to verify a car’s odometer reading.