WHEN John Smith (not his real name) lost his job and the bills kept rolling in, a quick solution came to mind. Like some other car owners in the United States suddenly out of work and facing high monthly car payments, Mr. Smith sent his bright-red 1990 car to the bottom of a lake and reported it stolen.Eventually, his insurance company settled with him for $12,000. A month later, the police pulled the car from the lake with the keys in the ignition. Smith was arrested for fraud. In the United States, where a motor vehicle is stolen every 22 seconds and the number of cars stolen each year is at an annual all-time high, Smith's disposal of his car is known in the auto insurance world as a "give up." This is a fairly straightforward criminal act, but it is part of a growing number of auto-related crimes US authorities face, including stolen cars, rebuilt cars, auto fraud, and false registration of vehicles. In 1990, the estimated value of motor vehicles stolen nationwide was more than $8 billion. "The reason why auto theft continues to rise," says Rick Morrow, vice president of M&M Auto Parts Inc. in Stafford, Va., "is that there is not enough outcry from the public. It is a 'victimless' crime. The loss is spread across so many people, but no one is hurt enough to bring an outcry." David Hurst, a corporate spokesman for State Farm Mutual Insurance in Bloomington, Ill., the largest auto insurance underwriter in the US, says, "Years ago auto theft was mostly teenagers going for joy rides. Today, auto theft is carried out by pros. It is more of a business now. Specific cars are ordered and then stolen by auto rings." "Raising money for drug habits is another cause for rising auto thefts," says John Maes, a spokesman for the nonprofit National Auto Theft Bureau in Palos Hills, Ill. The bureau is funded by more than 600 insurance companies. Mr. Maes also cites the "sophistication of auto theft rings," including "chop shops" that illegally strip cars and trucks for parts or rebuild damaged cars and sell them as new or never involved in an accident.
Chop shops 'blend' wrecks Mr. Morrow asserts that, at least in Virginia, it is not an uncommon practice for legal and illegal chop shops to take two wrecked cars, one with substantial damage to the rear and the other with damage to the front, for instance, and "blend" the undamaged halves into a "rebuilt" car. "The buyer isn't told what he's buying. This is a deception," he says. "If he was told, he might not be willing to pay as much for the car." Morrow, who has served on a state task force looking into ways to stop auto theft and fraud and to improve consumer information about cars, says, "In Virginia in 1989 alone, there were 8,000 such [rebuilt] cars sold, and the buyer wasn't told that the car was rebuilt." Asked if this was a problem in most states, Mr. Hurst from State Farm Mutual responded, "This is not a particular problem that I am aware of." In Virginia next year the state will initiate a law using a formula to establish whether or not enough of a wrecked car is salvageable in order to have it rebuilt. Generally, 75 percent of the car will have to be salvageable. "This is a step in the right direction," says Morrow, "but the insurance companies alone will [inspect the cars] and apply the formula." According to Robert Springer of the Massachusetts Governor's Auto Theft Strike Force, his state has a workable salvage title law. "Cars that are rebuilt must be registered and checked out by trained people from the state," Officer Springer says. The task force has a hot-tip number (1-800-HOT AUTO) to receive anonymous calls about stolen vehicles or fraud activity. Auto-theft rings operate all over the country. A common approach is to take vehicle identification numbers (VINS) from junked cars and put them on stolen cars. The stolen vehicles are then legally inspected and resold, sometimes through dealers.
Auto-theft rings broken up Last month in Nassau County, New York, police broke up a mob-related car-theft ring involving 70 luxury cars stolen and sold to new owners over a three-year period. Some cars were sold through legitimate dealers, who bought them from a wholesaler. Other vehicles were bought by individuals, who knew the cars were stolen, for much less than market value. All the cars have been confiscated until authorities can trace the VINS and unravel who owns the cars, either the former owners or the insurance companies. Early this month in Georgia, the US attorney's office brought indictments against an auto-theft ring that went as far as Chicago to steal dozens of Corvettes and other sports cars. The indictments stated that many of the cars were tagged with new VINS and sold, sometimes as new cars.
High-tech countermeasures To thwart criminals, some car manufacturers are adding high-tech anti-theft devices to some of the newer cars. General Motors put electronic sensors in the ignition locks of 1989 Chevrolet Camaros and Pontiac Firebirds, popular cars among thieves. Use the wrong key in the lock and the car's engine is disabled for four minutes. GM says thefts of these cars have dropped significantly. "Ford has moved the ignition switch further down the steering column, and some Chevys have added a piece of metal to the ignition that becomes a metal door that closes if the system is tampered with," Officer Springer of the Massachusetts strike force says. Add more devices, including new radio technology that notifies police when a car is stolen and allows them to track the car, and the cost of the car increases. "A big part of the problem," says Mr. Hurst of State Farm Mutual, "is that the culprits come up with new ways to steal cars. They are like insects that build up an immunity" to pesticides.