Fighting Fraud

Fighting Fraud

AAMVA’s many verification and information sharing systems provide a safety net to catch fraud in the act

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With technological advances, preventing fraud is an ever-changing game. The quality of printing and photo manipulation on fake identification documents have made it hard for businesses to tell a fake from a genuine product.

“And to a layperson, or even an issuing agent or car dealership, just looking at a license, you can’t tell if it’s counterfeit or not,” says Brent Lawson, former director of the risk management office for Pennsylvania Department of Transportation, Driver & Vehicle Services (now communications manager for the Commonwealth of Pennsylvania Office of Administration).

The DLDV Service

Fortunately, technology to fight fraud has also evolved to meet the challenges these fake documents pose. AAMVA’s many verification and information sharing systems provide a safety net to catch fraud in the act.

AAMVA’s Driver’s License Data Verification (DLDV) Service gives both commercial and governmental entities the ability to verify license and ID information instantly, comparing the data on a driver’s license or ID card with the information stored in secure state DMV records. DLDV is available for use by any organization that needs to verify a driver’s license.

Key benefits of the DLDV service center on speed, accuracy and security. Verification can be completed in a matter of seconds. DLDV ensures accurate verification results, reducing the risk of human error. Lastly, DLDV follows strict data protection regulations to ensure the confidentiality of personal information.

“DLDV is an excellent tool to protect consumers and the integrity of the credential issued by the motor vehicle agency,” says Philip Quinlan, vice president, Business Solutions at AAMVA. “A fraudulent driver’s license or identification card can be created where a real person’s information, such as name, date of birth and address, is stolen and combined with other falsified personal information to create a new identity document. DLDV can prevent this credential from being used to commit fraud by verifying the information in real time with data from the issuing agency. This way, an individual’s personal information cannot be unknowingly used to perpetrate fraud.”

DLDV is used by governmental agencies as well as retail stores such as Home Depot and Lowe’s as a means to verify identification when applying for store credit. DLDV also caught the attention of the Pennsylvania Department of Transportation, PennDOT, as a means to protect against fraudulent or misleading transactions. “About two years ago, I heard about DLDV for retail. I thought, well, if it’s verifying driver’s licenses, why can’t we use it to verify driver’s licenses and IDs when you’re titling and doing a motor vehicle transaction?” says Lawson.

“In January 2022,” he continues, “Pennsylvania made it mandatory for all issuing agents under contract with the department to use DLDV when titling a vehicle. Since January 2023, there’s been approximately 2.2 million inquiries that have been done through DLDV for motor vehicle transactions. We’re averaging about 227,000 inquiries a month. From that, we’ve gotten 79 confirmed counterfeit driver’s licenses that were used to try to title a vehicle in Pennsylvania.”

DLDV’s success at mitigating fraud has led to other states working with their stakeholders to implement similar business processes. New use cases range from motor vehicle dealers who want a higher level of identity assurance when selling a vehicle to companies who vet individuals for federal identity programs.

NMVTIS

In addition to car dealerships utilizing DLDV to prevent fraud, they also have access to the National Motor Vehicle Title Information System (NMVTIS). NMVTIS was created to help prevent motor vehicles fraud and theft. The system provides valuable information about vehicles, acting as a central repository of vehicle history. It can be accessed by authorized entities, such as law enforcement agencies, insurers and consumers, to retrieve important information about a vehicle’s title, history, odometer readings and more.

NMVTIS collects data from various sources including state motor vehicle departments, salvage and junk yards, insurance carriers and auto recyclers. The data is then compiled into a single database that can be accessed by authorized users.

“Vehicle history reports that contain NMVTIS information are a key tool to help consumers make an informed decision about purchasing a used vehicle,” Quinlan adds. “NMVTIS data include five key data points: 1) current state of title; 2) title issue date; 3) odometer reading at time vehicle was titled; 4) any ‘brands,’ meaning, any events/conditions that could impact the safety or value of the vehicle; and finally 5) information if the vehicle was ever in the possession of an entity that determined the vehicle to be junk/salvage or an insurance total loss. These data points, coupled with an authorized vehicle inspection, are a simple way for a prospective buyer to determine if they should purchase a vehicle.”

With access to accurate vehicle history information, NMVTIS helps prevent fraud related to title washing (altering a vehicle’s history to conceal previous damage or theft) and VIN cloning (using a stolen vehicle identification number on a different vehicle). NMVTIS enables consumers to make informed decisions when purchasing a used vehicle, providing reliable information about any reported theft or damage, ensuring that consumers are not unknowingly buying a stolen or damaged vehicle. Additionally, by providing data on salvage and junk vehicles, NMVTIS helps prevent unsafe vehicles from being resold to unsuspecting buyers.

Vivienne Cameron, senior director of special projects for AAMVA, oversees strategic and operational management of NMVTIS. “It’s a federal mandate that all states participate in NMVTIS,” she explains. “Established under the Anti Car Theft Act of 1992, state motor vehicle agencies are required to report core title information to a central site.”

This repository is especially helpful in cases where a car may be registered in one state or jurisdiction and sold in another. Since jurisdictions vary in what they are required to report, it is helpful to have a single database that covers details, such as whether the vehicle was ever junked, salvaged or any other events that may affect the overall safety of the vehicle. “NMVTIS maintains a history of those events,” Cameron says. “So if a vehicle has been titled in five or six jurisdictions over its lifetime, that information is in the system. The intent of the system is to protect consumers from fraud, protecting people against unknowingly buying vehicles that are not really as presented by the seller. This potentially means stolen vehicles, fraudulently reported vehicles and vehicles that may be unsafe.”

When a vehicle is stolen, it’s reported to the police, but the various state motor vehicle agencies may have no access to that report. Without NMVTIS, there is a risk of retitling vehicles in one jurisdiction that have been reported stolen elsewhere.

While all states participate in NMVTIS, California goes an extra step. There, a statute requires that any vehicle offered for sale by a used car dealer must have a vehicle history report, and that report must be made available to prospective purchasers. If the NMVTIS report has some indication of a negative brand, that information has to be clearly communicated to the prospective purchaser. AAMVA has a policy that encourages states to take a similar approach, but California is currently the only state that requires dealers to do this.

PennDOT

In Pennsylvania, according to Lawson, running DLDV is now mandatory, in addition to the already-required NMVTIS. The DLDV check is done electronically by an issuing agent. A manual equivalent procedure for non-online agents also exists. The issuing agent is required to make a printout of the outcome and keep a copy of the driver’s license front and back. Copying the driver’s license is a longstanding policy required for titling by PennDOT.

“Now, in addition, they have to put the results of the DLDV in with the paperwork,” Lawson says. “And then when they get audited by the risk management staff auditors, issuing agents have to present this in the title work. On the electronic side, for an online issuing agent, that’s automatically in the packet of work that gets sent into the department.”

The complete vehicle history provided by NMVTIS and the instant identification of identity gained with DLDV can both play important roles in protecting consumers, preventing fraud and promoting vehicle safety. Should the further step mandated in California spread throughout the country, the protection available to consumers would be even greater.

Learn more about NMVTIS in its most recent annual report, available at aamva.org/vehicles/nmvtis/nmvtis-for-state-titling-agencies.


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