VIN Fraud Uncovered: Protecting Your Customers and Your Dealership (Part 1 of 2)

Stolen vehicles disguised with fake identities are circulating in the Canadian market. We estimate that over 372,000 cloned VINs (Vehicle Identification Number) are on the road right now, making VIN fraud an increasingly real and urgent threat for dealerships and buyers alike. But our latest research shows that only about four in ten (38%) Canadian car buyers understand what VIN fraud actually is.  

This knowledge gap represents a significant risk and opportunity for dealerships. 

Shedding light on VIN fraud

VIN fraud involves tampering with a vehicle’s VIN to mask its identity, often through an illegal practice known as VIN cloning. Criminals steal VINs from legitimate vehicles and apply them to stolen ones. 

Here’s how it typically works: 

• Harvesting "clean" VINs: Fraudsters collect legitimate VINs from online listings or directly from vehicle dashboards. 
• Manufacturing counterfeit VIN plates: Using harvested numbers, criminals create duplicate VIN plates and falsified documentation.
• Stealing similar vehicles: Criminals target and steal vehicles that match the make, model, and year of the "donor" vehicle.
• Swapping identities: The stolen vehicle's original VIN is replaced with the cloned one, creating a stolen vehicle with a seemingly clean history.
• Selling the stolen goods: These cloned vehicles are then sold to unsuspecting buyers — sometimes through private sales, but they can also end up in dealerships.
  

Consumer education protects everyone

Informing buyers about VIN fraud helps raise awareness and acts as their first line of defense. Victims of VIN fraud can face severe consequences:  

• Vehicle seizure by authorities
• Insurers refusing to pay for repairs or theft
• Significantly reduced resale value
• Inability to sell or trade-in 

When we informed consumers about these potential consequences in our latest research, their level of concern about VIN fraud rose significantly. And it’s obvious why: protecting themselves from fraud can save them money, frustration, and time. 

Your role as a trusted advisor

Dealerships positioned as trusted experts with their customers’ best interests at heart stand out in the market. Providing resources and expert guidance on VIN fraud can reassure buyers and help build stronger, long-term relationships. 

 And make no mistake, VIN fraud also poses direct risks to your dealership: 

• Financial losses when cloned vehicles are repossessed from your inventory
• Reputational damages
• Potential legal exposure and regulatory investigations
• Loss of customer confidence and trust 

By proactively educating customers and implementing a standardized verification practice, you can protect your dealership and customers.  

What's Next

Education is the foundation, but action will make the real difference in curbing VIN fraud. In Part 2, we'll explore the verification practices that can catch VIN fraud before it reaches your lot and the tools that give customers increased confidence in their purchases and your dealership.  

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