The U.S. Department of Justice says identity theft is one of the fastest growing crimes in the United States, with an estimated 500,000 to 700,000 victims per year.
Within the auto industry, the Federal Trade Commission reported that it and the Social Security Administration received about 1,700 complaints last year where identity-theft victims learned that a car loan or lease was taken in their name, without their knowledge.
Sometimes identity thieves steal cars for their own use, but the big-time thieves typically resell cars to raise cash, said Lyn Porter, vice president of fraud solutions for Experian, a credit bureau in Costa Mesa, Calif.
"They are looking to get cars, ship them out of the country, break them up into parts and sell the parts or sell them with forged paperwork, often to finance other criminal enterprises," she said.
Diane Terry, director of the fraud victim assistance department for the TransUnion LLC credit bureau in Fullerton, Calif., said it is common for dealership employees to be in cahoots with identity thieves.
In one case, she said a salesman stole information from credit applications that had been refused. He used those identities to buy cars at other dealerships possibly with the cooperation of other salespeople there, she said.
In another case, nine men in Southern California stole identities and acted as loan brokers. A cooperative dealership employee wrote up the paperwork, and the men successfully originated millions of dollars' worth of loans before they were caught and ultimately pleaded guilty, Terry said.