Vehicles with an Identity Crisis

Vehicle crime is a highly organised criminal activity which affects almost every country in the world. Hearing about someone who has been the victim of vehicle crime (such as theft, hijacking, or fraud) is no strange occurrence in South Africa. It is for this reason that SERVAMUS will address some specific forms of vehicle crime for the next few months, kicking off with the cloning of vehicles. This organised crime leaves thousands of vehicles globally with an identity crisis.

The most recent South African crime statistics, which were released by the SAPS in September 2014 and which apply to the reporting period between April 2013 and March 2014, indicate a 2.6% decrease in vehicle theft (down from 58 312 to 56 616). In terms of aggravated robbery, the SAPS reported an increase from 9990 to 11 221 in carjacking (an 12.3% increase), while truckjackings had also increased by 5.1% (to 991 truckjackings). However, what about vehicle fraud, such as the cloning of vehicles? How big a problem is this? According to The Insurance Crime Bureau, vehicle "cloning" is a scam that is growing at an alarming rate all over the world. In South Africa, vehicles to the value of approximately R8.5 billion are stolen or hijacked annually. Shockingly, 36.4% of these vehicles (valued at R3.1 billion) stay behind in SA and are filtered back into the hands of consumers as cloned vehicles.

What is vehicle cloning?

Cloning a vehicle is the equivalent of identity theft - it simply entails stealing a legitimately owned vehicle's identity. Cloning refers to the exact duplication or copy of a car which was legally bought and registered. According to The Insurance Crime Bureau, a cloned vehicle, as a term, is used to describe a vehicle that has had its identity changed, usually because it is a stolen or hijacked vehicle.

How is it done?

Criminals have become experts in getting rid of a vehicle's original identity number and information simply by cloning it. The cloning of vehicles happens when criminals transfer the stamped VIN number, the printed VIN sticker and the stamped engine numbers from legally owned vehicles to illegally obtained vehicles of the same make, model and colour, in an effort to legitimise the stolen vehicle. As a result, there are suddenly two or more vehicles that look exactly the same in terms of their identity and vehicle identification. Basically, the criminal steals the identity of a vehicle which is authorised in the system in order to authenticate the stolen vehicle.

A whole network of role-players is required for vehicle cloning, from the person who steals or hijacks the vehicle to the corrupt official at the licensing offices. The criminals involved in the cloning of vehicles are normally part of a syndicate that specialises in vehicle crime and that sells these cloned vehicles to consumers who do not suspect any wrongdoing.

Methods used

Criminal syndicates apply various methods in obtaining the identity of vehicles to clone. These include:

• Purchasing wrecked vehicles - the particulars of the wrecked vehicle are taken and transferred onto a stolen or hijacked vehicle. Barry (2014) states that the connection between vehicle cloning, vehicle salvage auctions and the increased number of vehicle write-offs by insurance companies is concerning, if not sinister, and it appears to be a growing problem. It seems that vehicle cloning has been made easier by the fact that vehicle salvage is more readily available to the public, mainly via auctions where syndicates purchase these wrecked vehicles and then transfer the particulars of the wrecked vehicle onto a stolen or hijacked vehicle. However, according to The Insurance Crime Bureau, this method is costly and leaves a paper trail through receipts that could be traced back to the purchaser of the wrecked vehicle.
• Using dormant records on the eNatis system - dormant records can be records of vehicles that were built by manufacturers in South Africa, registered, and then exported out of the country. The Manufacture Import Build (MIB) record remains and makes it easy for corrupt officials to obtain a new identity for a stolen vehicle. It can also happen when a foreigner buys a second-hand vehicle and takes it out of the country. Although the vehicle has left the country, the record remains on eNatis. The Insurance Crime Bureau notes that this method of cloning is very efficient as the vehicle identity used for the cloning is no longer in the country and is therefore more difficult to track.
• Using the records of wrecked vehicles - when insurance companies want to dispose of their wrecked vehicles, they sometimes find thatthe vehicle is no longer registered in the company's name. This results in a headache for insurance companies as the disposal of their wrecked vehicle becomes almost impossible.
• Using live records of vehicles - this happens when criminals "hijack" the live records and registration details of vehicles that are financed. When the registered owners want to renew their vehicle's licence, the owner makes a shocking finding, namely that the vehicle is no longer registered in his/her name.

Anybody can be a victim After the "marriage" between the fraudulent papers and the vehicle has taken place, the stolen vehicle has obtained its new identity. A middleman can now take the vehicle either to a dealer or to the innocent second-hand buyer.

Vehicle cloning results in innocent people becoming victims of vehicle fraud, because they may buy vehicles without knowing that they are cloned and end up as fraud suspects. Unfortunately, the victims of vehicle cloning are usually the ones who end up paying for this highly lucrative crime.

Once a cloned vehicle has been identified in a victim's possession, the insurance cover that has been taken out on the vehicle becomes null and void. The authorities also confiscate the vehicle and there is no possibility of retrieving the money that the victim has already paid for it. Although the victim is not the rightful owner of the vehicle, s/he has to continue paying the instalments despite having lost the vehicle. The victim also forfeits any deposit or additional payments made. The process of identifying the legitimate vehicle and the record is an inconvenience to the innocent owner, who cannot sell such a vehicle until the investigation has been finalised, and at times, the vehicle is held until ownership is proved.

Criminals who clone cars are so arrogant that they even clone police vehicles. In August 2013, a cloned Gauteng Flying Squad vehicle, which might possibly have been used in more than 35 crimes in and around Johannesburg within a year's time, was recovered.

A growing concern

Vehicle cloning syndicates are becoming a growing concern for the insurance industry. In 2013, approximately 39 000 vehicles re-appeared into the system, costing a fortune for the insurance companies which had to pay out claims while unaware that these vehicles were, in fact, cloned.

How does a vehicle owner know his/her vehicle is cloned?

One of the first signs that vehicle has been cloned is when the vehicle owner begins to receive fines, speeding tickets and other documentation for offences s/he did not commit. For example, you may receive parking or speeding fines for incidents that occurred in areas that you have never visited. If you suspect that a vehicle has been cloned or know of syndicates selling cloned vehicles, you can report it by calling the Insurance Fraudline at 0860 002 526 or calling Crime Stop at 08600 10111, or sending a detailed SMS to Crime Line at: 32211.

Consumers must protect themselves

• It is important that consumers protect themselves and take the necessary precautions to prevent falling victim to vehicle cloning when buying a vehicle. These precautions include the following:
• Buy only from reputable dealers and take practical steps to verify the identification of the car prior to purchasing it.
• Be careful when buying a used vehicle online or from a newspaper classified advertisement where only a cellphone number is given as a contact.
• When purchasing a used vehicle, ask for the service book/owner's manual, which should accompany the vehicle at all times. Always check the history of the vehicle and make sure that you view it at the registered keeper's address (as shown on the V5/logbook). Buyers should ensure that the VIN/chassis numbers on vehicles match each other.
• Make sure that the vehicle has two sets of keys and that the keys for the doors and the ignition correlate.
• Check for damages to locks and the ignition.
• Do not pay with a substantial amount of cash. Demands for cash payment should always set the alarm bells ringing.
• Know the vehicle's market value. If you are paying less than 70% of the market price for a vehicle, then you should be on your guard.
• Always trust your instincts. If a used vehicle deal sounds too good to be true, it is better to wave goodbye to the deal.

List of references

Barry, H. 2014. "Vehicle cloning, auctions and the insurance industry." - Accessed at www.moneyweb.co.za/moneyweb-so... on 3 February 2015. www.saicb.co.za/news/articles/118-vehicle-cloning be informed don't be a victim - Accessed on 2 and 3 February 2015. www.wheels24.co.za/News/Crime-... - Accessed on 2 and 3 February 2015. www.fanews.co.za/article/short... - Accessed on 3 February 2015. www.fin24.com/Economy/Cloned-c... - Accessed on 2 and 3 February 2015.