Buyers beware of flood-damaged vehicles being resold as good used cars
DES PLAINES, Ill. – As South Carolina struggles to recover from record-breaking rainfall and flooding, the National Insurance Crime Bureau (NICB) is working with law enforcement agencies, insurance and car rental companies to identify and catalog water-damaged vehicles and keep them from being resold to unsuspecting consumers.
Authorities estimate that thousands of vehicles may have been flooded.
“Unfortunately, natural disasters bring out dishonest salvage dealers who don’t tell you that the vehicles they’re selling are heavily water-damaged,” said NICB President and CEO Joe Wehrle. “Consumers need to know that these vehicles may appear advertised for sale without any indication that they were affected by the flooding. As always, buyers should be careful when considering a used vehicle purchase in the weeks and months following a disaster like this.”
NICB agents are already working with law enforcement and member companies to identify these damaged vehicles and to help keep would-be buyers from becoming fraud victims.
A History of Helping When Disaster Strikes
In the aftermath of Hurricane Katrina 10 years ago, NICB agents worked side by side with law enforcement officials to inspect thousands of vehicles damaged by flood waters. As a result of that unprecedented effort, NICB established a first-of-its-kind consumer protection service known today as VINCheckSM. It allows car buyers to see whether a vehicle has ever been declared as “salvage” or a total loss by an NICB member that participates in VINCheck. Insurers representing about 88 percent of the personal auto insurance market provide their salvage data to the program. It also alerts users if a vehicle has been stolen and is still unrecovered. VINCheck is a free public service available at www.nicb.org.
NICB encourages those entities required by law to report flood-damaged vehicles to the National Motor Vehicle Title Information System (NMVTIS) which currently includes information on 96 percent of all U.S. vehicles. Currently, 44 states report data to the system which contains approximately 20 million salvage or total loss records.
Potential for Fraud
In the weeks ahead, consumers should be on the lookout for other post-flood fraud schemes such as towing companies that try to pressure them into using their service and then charge exorbitant towing and storage fees. In addition, homeowners in disaster areas should be alert to the potential for fraud by unscrupulous contractors and home repair businesses.
“Fraud is an unfortunate reality in post-disaster environments,” said Wehrle. “As the recovery in South Carolina gets underway, fraudsters are already scheming to converge on the affected areas in order to scam disaster victims out of their money while promising to do repairs. The last thing victims of disaster need is to be victimized again.”
Consumer Resources
• For a free brochure with tips to avoid post-disaster fraud, click here.
• For useful checklists, including how to spot flood and salvage vehicle scams and post-disaster contractor repair schemes, click here.
• For free consumer access to the vehicle salvage records of participating NICB member insurance companies who collectively provide 88 percent of the auto insurance in force today, access NICB’s VINCheck.
Anyone with information concerning insurance fraud or vehicle theft can report it anonymously by calling toll-free 800-TEL-NICB (800-835-6422), texting keyword “fraud” to TIP411 (847411) or submitting a form on our website. Or, download the NICB Fraud Tips app on your iPhone or Android device.
About the National Insurance Crime Bureau: Headquartered in Des Plaines, Ill., the NICB is the nation's leading not-for-profit organization exclusively dedicated to preventing, detecting and defeating insurance fraud and vehicle theft through data analytics, investigations, training, legislative advocacy and public awareness. The NICB is supported by more than 1,100 property and casualty insurance companies and self-insured organizations. NICB member companies wrote over $395 billion in insurance premiums in 2014, or more than 78 percent of the nation's property/casualty insurance. That includes more than 93 percent ($176 billion) of the nation's personal auto insurance. To learn more visit www.nicb.org.
For more information, contact the South Carolina Insurance News Service at 803-252-3455 or use our contact form.