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June 2007
A gate with a sign warns drivers to Park at your own risk.

Auto thefts and recyclers

Following a recent raid of Recyclage D’Auto Yasmine, a used car parts facility in St. Eustache, Quebec, the Laval Police Department has charged the owner with 258 counts of accepting stolen goods.

Canadian police authorities believe this raid has led them to the largest “chop shop” facility in Canada. Suspicions were raised due to the high volume of luxury cars entering the facility. Authorities are inspecting more than 700 complete vehicles, as well hundreds more in the process of having their parts removed. The ongoing search of the 100,000 square foot lot has yielded many luxury SUVs, Mercedes and similar high-end vehicles.

Unfortunately, while the raid’s focus on putting an end to the illegal activities was applauded, the public was once again given the impression that some automotive recycling operations are involved with criminals.

This is an impression that George Eliades, the CEO of the Automotive Recyclers Association (ARA), does not appreciate and works hard to challenge. Of the approximately 7,100 licensed vehicle recycling operations (recycling and dismantling) in the United States, the ARA represents around 1,000.

Eliades noted that while there may be some automotive recyclers who do accept stolen goods, he is only aware of one case. In that situation, a Louisiana-based operation was involved in accepting stolen vehicles, however, that person is now back in business and runs a clean operation.

“A car is stolen every 26 seconds,” says Eliades. “Interpol says the annual car theft ring is a $20 billion operation. The chop shops are where these stolen vehicles wind up.” However, to put the situation in perspective, 95 percent of all the vehicles worldwide that are retired from use are legitimately recycled by law-abiding automotive recycling operations.

“We want to protect the reputation of this industry,” says Eliades. “We have a hard enough time fighting this ‘junk yard’ label as it is. As such, ARA works with local law enforcement on these matters as well as with national crime fighting bureaus. ARA is involved with the North American Export Committee. We also work closely with the National Insurance Crime Bureau (NICB).”

The ARA is also working with the United States Congress to secure national legislation to address the problem.

“People will steal a car to get the VIN number,” Eliades said. “They’ll take the VIN from a car bought at an auction and put it on the one they stole so they can have a clean title.” The ARA is hoping that Congress will soon a pass a bill that will require the public disclosure of VIN (Vehicle Identification Number) registration numbers of total loss vehicles through the placement of those records on an accessible electronic database. Currently, the United States House of Representatives and the Senate are each looking at separate but similar bills on this subject.

“This public disclosure is essential so that people can get the history of a vehicle as soon as that car is declared a total loss or reaches end-of-life and prior to the consumer’s purchase of that vehicle,” says Eliades. “We are also trying to get an export provision added to the legislation that would prevent the export of multiple vehicles using the same VIN number.”

There is pretty good support in both United States political parties for the legislation. On the Senate side, Senate Minority Leader Trent Lott (R-MS) introduced legislation (S.545) that is gaining interest, while in the House, public VIN disclosure is being advocated for by both Republican and Democratic members.

“We are trying to get this legislation passed in the 110th Congress to try and prevent some of the criminal activities that are involved with motor vehicles,” says Eliades.

Supporters of the legislation are regularly adding cosponsors, working on the language along with passage strategies. Unfortunately, according to Eliades, “the longer this vetting process continues, the more likely congressional interest will wane due to other more pressing or politically-attractive issues.”

The ARA stresses that much of the criminal activities with vehicles are based on a lack of integrity in the vehicle titling process, VIN data availability and the increasing value for stolen parts. Many vehicle thefts occur in order to secure the catalytic converters, which contain platinum, radium and rhodium.

“Criminals are breaking into repair facilities to clip these parts,” says Eliades.

These valuable metals are much sought after commodities even though current law in the United States does not allow for these devices to be re-attached to vehicles.

Also highly sought after automotive parts are OEM non-deployed air bags, adds Eliades.

“The VIN data is important,” he notes, because “the automobile titling laws in the 50 states and District of Columbia are confusing, contradictory and incomplete.”

The problem is compounded because insurance companies do not have to report all of their total loss declarations.

“They report most of them to NICB, but they don’t have to do it,” says Eliades. “Why don’t they do this? Because they want to sell that vehicle, and consumer’s full knowledge of the vehicle’s history may result is a lower auction price or worse, an inability to sell the vehicle. As such, insurance companies have a strong incentive to oppose more aggressive state laws.”

Eliades bases this view on State Farm admitting in 2003 that it sold more than 30,000 vehicles without a salvage title – cars that experienced severe damage. While insurance companies need only title a vehicle according to the particular requirements of state law, the confusing titles and “brands” can mislead consumers.

By having a public database of total loss vehicle VINs, purchasers of used cars can learn about the vehicle’s history prior to purchase, and parts from a vehicle could be identified, thus making it easier for industry and the police to determine whether a vehicle had been stolen.


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