NICB Warns Consumers of Potential Flood Vehicle Risk

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Jun 02, 2011, 06:00 ET

Record Storms and Flooding Enable Used Vehicle Scams

DES PLAINES, Ill., June 2, 2011 /PRNewswire-USNewswire/ -- The National Insurance Crime Bureau (NICB) today is warning consumers shopping for used vehicles to use caution when considering a purchase that just seems too good to be true. As severe weather and flooding continues across much of the nation, many vehicles will be subjected to storm and water damage. Many of those vehicles will be declared as total losses by the companies that insured them and sold as salvage.

While there are legitimate ways to acquire and use a salvage vehicle, many scam artists will often hide the fact that a vehicle was flooded or declared as salvage seeking to sell it for a handsome profit to some unsuspecting consumer. People who engage in this kind of scam are very good at masking the telltale signs of water inundation and unless you know where to look—or smell—you are risking serious financial hardship.

To help prevent this kind of scam, which was occurring in the aftermath of Hurricane Katrina in 2005, the NICB created VINCheck(SM), a free service that allows consumers to search the salvage and unrecovered stolen records of participating NICB member insurance companies. Consumers may run up to five vehicle identification numbers (VIN) each day.

Absent any state or local laws to the contrary, buying and selling salvage vehicles is perfectly legitimate when all parties to the deal are fully informed of the vehicle's history. But selling a salvage/flood vehicle without informing the buyer is where problems begin.

A particular late-model vehicle might normally sell for around $25,000. If you find one advertised for $15,000, that's a clue. Be very careful before handing over any money - you might be buying a mistake.

Some useful tips before buying any used vehicle:

Know the market for your particular vehicle
If the price seems too good to be true look for the reason why
Be wary of incomplete titles or registration records
Make sure that the VIN on the title matches the VIN on the vehicle
Inspect the vehicle for water lines, mud deposits or a mildew odor
Hire an auto technician to thoroughly examine the vehicle
When in doubt—walk away

Good used vehicles are bought and sold every day across the country without any hint of fraud and there is a legitimate role for salvage vehicles in the marketplace. But there is no place for individuals who prey upon unsuspecting consumers.

Access VINCheck at http://www.nicb.org/theft_and_fraud_awareness/vincheck/vincheck.

Anyone with information concerning vehicle theft and insurance fraud can report it anonymously by calling toll-free 1-800-TEL-NICB (1-800-835-6422), texting keyword "fraud" to TIP411 (847411) or by visiting our Web site at www.nicb.org.

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 $317 billion in insurance premiums in 2010, or approximately 80 percent of the nation's property/casualty insurance. That includes more than 93 percent ($151 billion) of the nation's personal auto insurance. To learn more visit www.nicb.org.

SOURCE National Insurance Crime Bureau