BY PCC STAFF
ANKENY – The Iowa Department of Transportation’s Bureau of Investigation and Identity Protection is warning Iowa residents looking to buy a used vehicle of a recent fraud trend involving businesses licensed as motor vehicle “wholesalers” in other states. These businesses have the potential to engage in title, tax, and odometer fraud.
The Bureau of Investigation has identified a trend in which individuals in neighboring states, like Illinois, obtain a “wholesale” motor vehicle dealer license from a different state such as Montana or Texas. A wholesale license from any state restricts the licensee to selling only to retailers, not directly to the public.
In the fraud scheme, the wholesaler advertises the vehicle for sale to the public on a website such as Craigslist, Facebook, Offer-Up, etc. They often hide the fact that the vehicle is owned by a “wholesaler” business by using a business address in another state.
Unsuspecting Iowa residents, contact the seller and arrange a meeting in a neighboring state, like Illinois, to purchase the vehicle. Customers often meet in a random store parking lot and bring cash for payment to the seller. A common example involves an Iowa resident driving to Illinois to purchase a vehicle from what turns out to be a Missouri wholesale business listed on the title and bill of sale.
When the Iowa customer applies to title and register the vehicle at their local county treasurer’s office, the paperwork and issuance of an Iowa title is often denied due to the illegal retail sale by the wholesaler. Other problems have been identified including the bill of sale provided by the wholesaler displaying a false purchase price that could lead to tax fraud charges if not corrected by the purchaser. Lastly, the Bureau of Investigation has discovered that many of these vehicles had their odometers illegally rolled back an average of 100,000 miles resulting in Iowa residents receiving a vehicle with many more miles than what the vehicle’s odometer shows.
The Bureau of Investigation provides the following tips to help Iowa residents avoid being a victim of this fraud trend.
- Research the vehicle and the seller prior to buying a vehicle.
- Ask the seller to produce a copy of the title prior to purchase, or review the title prior to paying for the vehicle.
- Conduct online searches of the vehicle history and the selling businesses name, if possible.
- Be leery of a seller asking you to drive to another state to purchase the vehicle when title and bill of sale indicate the seller is from yet a different state.
If you feel you are a victim of this “wholesale” fraud scheme, you are encouraged to notify the Bureau of Investigation & Identity Protection at 515-237-3050 or email firstname.lastname@example.org with your vehicle paperwork and contact information.