Title typically arrived from the Illinois Secretary of State’s office within four to six weeks. And by the time the title actually arrived, our restoration was complete, and we would have several “buyers” lined up. Our hobby was both fun and profitable.

On any given day, we could scan our high school lot and see several of “our restored cars” on it. The buyers always knew where we lived and could stop us in the high school hallways and seek our advice. We always stood by our “restored cars.”

Those were the “good old days.”

Today, now more than ever, with Facebook Marketplace, Craigslist, Autotrader, or eBay Motors, you need to know the answer to the question: “who is this seller?”  Then you need to answer and confirm “Is this car sold as ‘advertised?’”

This two-part series will discuss the pitfalls to avoid when buying or selling a used car today. In this part, we will discuss “Know who the other guy is.” In the second part, verify that the car is as “advertised.”

While the majority of “used car” sales are transacted at dealerships, one resource found that in July 2022 that 48% of all “used car” sales were transacted by private parties. After COVID, a significant bump in new car prices occurred and some commentators now believe that private party “used car” sales might exceed those sold at dealerships.

Buying and selling with a private party may offer significant savings but doing so also comes with risk.

One practice issue gaining increased attention from the regulators and auditors at the Secretary of State/DMV offices is “Title Curbstoning.” Simply, it is the practice of selling multiple vehicles without a dealer license while disguising those transactions as “private sales.”

Though it may appear harmless at first glance, Title Curbstoning creates significant legal, financial, and safety risks for consumers. This article outlines what Title Curbstoning is, how it violates dealer licensing laws, and what buyers and sellers need to understand about its legal consequences.

What is Title Curbstoning?

Title Curbstoning occurs when an individual or business sells vehicles to the public without a valid dealer license, often using deceptive methods to make the sale appear private. These individuals may purchase cars at auctions, from distressed sellers, or through trade-ins, and then resell them for profit without disclosing known issues or their business intent.

Curbstoners avoid putting their name on the title—either skipping ownership transfers altogether or misusing temporary registration documents. The term “Curbstoning” comes from the common practice of parking cars on the side of the road (often near curbs) with “for sale” signs, creating the appearance of a casual, private sale.

We can prevent curbstoners by either insisting that as a seller, the assignment and transfer of title will occur at the sale, or as a buyer, only proceed with the purchase with a title that will be immediately accepted by the Secretary of State/DMV. If the curbstoner insists that neither is necessary, walk away from the deal. Beware of the consequences should you proceed.

The first consequence of selling to a curbstoner is that they will ask you to leave the title blank. So, when you sell your car, they ask you to sign but leave blank to whom you are transferring or assigning the title. The rule of thumb is to ensure that you either accompany the buyer to the currency exchange or DMV to transfer title to the buyer, or complete the sale and assign the title to the buyer by executing on the title itself.

Until the Secretary of State/DMV office recognizes the transfer or assignment, you—the seller—remain on title and responsible for everything that happens with that vehicle whether it is a parking ticket, toll charge, or vehicle citation. The Secretary of State/DMV/Toll Authorities/Municipalities will come back and look to you to pay for any charges incurred. [At a minimum, take a photo with your camera on your phone and preserve that record in the event something occurs to the vehicle. Always document that you have transferred or assigned title to the private party, as well as to the used or new car dealership. If possible, then also notify the Secretary of State/DMV of the sale, too.]

By alerting the Secretary of State/DMV to the transfer or assignment of the title, that will begin to reduce the first consequence of Title Curbstoning.

The Second Consequence of Title Curbstoning

The second consequence of Title Curbstoning can occur in two ways: First, the assignment or transfer of title has not been timely satisfied.

Each state imposes specific deadlines for when a vehicle title must be registered following a sale. Failure to file within these timeframes can result in penalties, delayed ownership recognition, or exposure to legal disputes. Below are selected state requirements:

• Illinois: 5 business days after delivery of the vehicle and assigned title (625 ILCS 5/3-112(b); People v. Johns, 153 Ill. 2d 436).
• California: 20 days from the vehicle’s first operation in the state (Cal Veh Code § 4152.5).
• New York: 30 days after the transfer of ownership (NY CLS Veh & Tr § 2104; People v. Reyes).
• New Jersey: 10 days after purchase to submit proof and receive certificate of ownership (N.J. Stat. § 39:10-11; Progressive Group v. Hurtado).
• Texas: 30 days for most transactions; up to 45 days for seller-financed sales (Tex. Transp. Code § 501.145; Tex. Tax Code § 152.069).
• Florida: 30 days to apply for a certificate of title; penalties apply for delay (Fla. Stat. §§ 319.22–23)

Noncompliance can lead to civil penalties, tax liabilities, loss of marketable title status, or failure to perfect liens. In some states, late filing may expose the buyer to criminal liability, especially where fraud or evasion is involved. Delays in filing also increase the likelihood of curbstoning-related risks and ownership confusion.

The second way that Title Curbstoning arises is when the state’s threshold for the number of vehicles that can be sold by an individual as a private party has been exceeded within a twelve month period.

States have regulations that are triggered when a private party sells a specified amount of vehicles within a twelve month period. When that happens, it triggers the requirement for a dealer license. These limits are designed to distinguish genuine private sales from unregulated business activity. Once someone crosses that line—by selling multiple vehicles for profit, operating without a license, or failing to follow title laws—they are in violation of state dealer licensing statutes.

Title Curbstoning is illegal for several reasons:

• It circumvents consumer protection laws such as vehicle disclosure requirements.
• It avoids tax and registration obligations, resulting in potential fraud.
• It violates title transfer laws, especially when sellers skip their own registration to avoid being held liable for defects, liens, or legal issues.

States also prohibit the use of dealer-only resources, such as wholesale auctions, by unlicensed individuals. In many jurisdictions, offering even one vehicle for sale without proper ownership documentation may qualify as an illegal sale.

How Many Cars Can You Sell Without a License?

While laws vary by state, most jurisdictions set strict limits on how many vehicles an individual can sell within a 12-month period before being legally classified as a dealer. These thresholds are in place to prevent commercial sellers from bypassing licensing, tax obligations, and consumer protection laws.

Below is a comparison showing the maximum number of vehicles you can sell per year without a dealer license in each U.S. state. Exceeding these limits—or acting in a commercial capacity even under the threshold—may result in fines, criminal charges, or classification as an unlicensed dealer.

Some states allow zero unlicensed vehicle sales per year, meaning any sale outside of a personal transaction involving a titled vehicle in your name may be considered a violation. States like New Jersey, North Dakota, and Oklahoma fall into this category.

Even in more lenient states, selling multiple cars for profit, skipping title transfers, or advertising repeatedly may subject the seller to penalties—even if they remain under the numeric cap.

Common Red Flags of Title Curbstoning

Buyers may encounter a curbstoner without realizing it. Here are warning signs that suggest a seller may be operating illegally:

• Seller name does not match the name on the title (i.e., “open title” or “jumped title”).
• The seller claims to be helping a friend or selling a family member’s car.
• No fixed business address: cars are listed across multiple online platforms.
• Temporary tags used to extend resale opportunities without titling.
• The seller appears to sell cars frequently but avoids putting their name on any documents.

If a seller avoids paperwork or rushes the sale, it may be a deliberate attempt to avoid legal exposure.

Legal Consequences for Unlicensed Sellers

Selling cars without a dealer license is typically a civil and criminal offense, depending on the number of violations and the presence of fraud. Penalties may include:

• Fines and penalties for each unlicensed transaction.
• Cease and desist orders issued by the state Department of Motor Vehicles (DMV) or Department of Revenue.
• Vehicle seizure if the state determines the seller is conducting business illegally.
• Criminal charges, particularly if tax evasion, title fraud, or deceptive business practices are involved.
• Civil liability if the buyer sues for fraud, misrepresentation, or undisclosed defects.

Additionally, sellers who avoid titling the vehicles in their own names may face title jumping violations, which are also illegal in all 50 states.

Risks to Buyers

Consumers who unknowingly purchase a vehicle from a title curbstoner face several potential problems:

• Undisclosed liens that prevent legal title transfer.
• Salvage or branded titles hidden from the buyer.
• Odometer rollbacks or concealed damage history.
• Void warranties and lack of recourse for repairs or refund.
• Difficulty registering or insuring the vehicle with the DMV—and then who do you turn to? The seller? The original owner who sold the vehicle to the “curbstoner”? Good luck. Even if you retain counsel, and weave through a mandamus action to order the DMV to title the vehicle, that could take months, not days.

In some cases, buyers may be forced to return the vehicle or take legal action to recover damages—often with little success if the seller disappears or cannot be located.

What Buyers Should Do Before Purchasing a Vehicle

To protect yourself from unlicensed sellers:

• Ask to see the seller’s ID and verify it matches the name on the title.
• Run a title history report through the DMV or a service like NMVTIS or Carfax.
• Avoid any sale where the seller won’t sign the title or provide a bill of sale.
• Check if the seller appears to have multiple listings or frequent turnover.
• Contact your state licensing board to report suspected curbstoners.

In Illinois, for example, complaints can be filed with the Illinois Secretary of State’s Police – Vehicle Services Department, which investigates Curbstoning and unlicensed dealer activity.

Conclusion

Title Curbstoning is more than just an informal way to sell vehicles—it is a clear violation of dealer licensing laws and a deceptive practice that leaves consumers exposed to serious legal and financial risks. From hidden liens and false ownership records to denied title transfers and undisclosed damage, the consequences for unsuspecting buyers can be significant and long-lasting.

Unlicensed sellers who operate outside regulatory oversight not only undermine public trust in the used car market but also deprive consumers of the protections guaranteed under state and federal law. States must take stronger action to identify and penalize Curbstoning activity, while buyers must remain vigilant and informed before making any vehicle purchase.

If you’ve purchased a vehicle from an unlicensed seller, suspect title fraud, or have been denied proper ownership transfer, contact FS CORPS immediately. Our legal team is experienced in handling title disputes, illegal sales violations, and Curbstoning-related fraud. We’re here to protect your rights and help hold unlawful sellers accountable.

Further, this Wisconsin lender came across the Illinois state line and knowingly violated Illinois’ APR statutory cap of 36%. The Wisconsin lender required bi-monthly payments, filed a lien against the vehicle as lienholder with the Illinois Secretary of State, and then “wrongfully repossessed” her Honda. We have filed a lawsuit against the Wisconsin lender and asked the court to void the loan agreement ab initio—meaning it has no legal effect in Illinois because it violated the Illinois APR statutory cap of 36%.

Across the United States, predatory vehicle lending, particularly those involving high-interest, short-term vehicle title loans—has increased and exposed consumers and borrowers to “usurious loans.” The “usurious loans” target borrowers who face financial hardship, have poor or no credit history, and promise quick cash while concealing excessive interest rates and exploitative terms.

In Illinois, where many borrowers already struggle with limited access to affordable credit, the impact of these lending schemes is especially severe. Lenders frequently operate through legal loopholes or out-of-state structures, offering loans that can exceed statutory interest rate caps and lead to “wrongful repossession.”

Key Takeaways

In this article, we explore the structure and consequences of high-interest and predatory vehicle title loans in Illinois, outlines recent legal actions taken to curb these practices, and outlines the remedies and protections available to affected consumers.

Understanding Usurious and Predatory Lending

The Illinois statutory framework clearly defines the limits of lawful vehicle loan interest rates. Under the Illinois Predatory Loan Prevention Act (PLPA), which came into effect in March 2021, interest rates for vehicle loans are capped at 36% APR, inclusive of all fees and charges. In our opinion, 36% is too high. Perhaps the Illinois legislature did not consider that most vehicle loans in Illinois often have interest rates between 24% and 36% APR which appear to be “legal”; however, when the APR plus the various miscellaneous terms and charges are factored in, those “legal” vehicle loans become “usurious” and exceed 36%.

We advocate for amendment to the Illinois PLPA to bring that rate at or below 25% as a growing majority of states have legislated. [See below.] Illinois needs to better combat “usurious loans”—which have historically plagued low-income, disabled veterans, and minority communities.

“Usurious loans,” by definition, exceed the legal interest rate ceiling. In Illinois, any loan agreement charging more than 36% APR is not only illegal but also exposes the lender to legal action. Borrowers can seek damages amounting to twice the total of all interest, discounts, and fees paid under the unlawful loan, along with court costs and reasonable attorney’s fees.

Predatory lending, while often involving high interest rates, encompasses a broader range of abusive practices—including vehicle title loans that put borrowers at risk of losing their only means of transportation under exploitative terms. According to the Illinois Attorney General, predatory loans are those made without regard for the borrower’s ability to repay, often through manipulation, deception, or aggressive sales tactics. The hallmarks of predatory lending include misleading promises, excessive fees, inflated loan amounts, and deceptive loan structures such as balloon payments and teaser rates.

Lawsuit Study: Pennsylvania v. Community Loans of America

A recent enforcement action in Pennsylvania highlights how predatory vehicle lending extends beyond state lines. In October 2023, Attorney General Michelle Henry announced a $2.2 million restitution settlement with Community Loans of America, Inc. (CLA), a national auto title lending company that issued thousands of unlawful loans to Pennsylvanians. Additionally, CLA agreed to cancel $3.7 million in outstanding consumer debt.

CLA, headquartered out of state and in Georgia, exploited Pennsylvanians by offering title loans with interest rates exceeding 300%. These loans were marketed to consumers facing personal financial crises, for example, high medical expenses or even recent job loss. Under Pennsylvania law, which caps interest rates at 25%, these loans were “usurious,” and illegal.

What made CLA’s actions particularly egregious was the use of deceptive tactics. Although CLA lacked any physical presence in Pennsylvania, it marketed loans through lead generators that falsely claimed to operate local offices. Consumers who searched Google for “Car Title Loan Philadelphia” were directed to phony locations but ultimately had to drive to Delaware to finalize the loan agreements. Regardless of location, Pennsylvania’s usury laws applied because CLA collected payments and repossessed vehicles within Philadelphia County and throughout Pennsylvania.

This lawsuit illustrates a growing trend: lenders seeking to bypass consumer protection laws by exploiting cross-border operations. The Pennsylvania Attorney General’s settlement not only secured restitution and debt cancellation but also signaled a warning to out-of-state lenders: unlawful lending practices will not go unpunished, regardless of jurisdiction.

The Illinois Vehicle Loan Crisis

In Illinois, similar concerns persist. Vehicle loans that exceed the 36% APR cap are targeted at low-income, elderly, and minority borrowers—those who have limited access to traditional credit.

The Illinois Attorney General has repeatedly cautioned consumers about common red flags associated with predatory vehicle loans. These include:

• False Promises and Guaranteed Approval: Marketing phrases such as “easy credit,” “we say yes to everybody,” or “no payment for 90 days” are often used to lure in borrowers without adequate disclosure.
• Excessive and Hidden Fees: Lenders may tack on undisclosed origination fees, credit insurance charges, or other unnecessary add-ons that inflate the overall cost of the loan.
• Adjustable and Balloon Interest Structures: Some loans start with low “teaser” rates that later spike or include balloon payments that make the loan unaffordable in the long term.
• Loan Flipping: Repeated refinancing without legitimate benefit, often referred to as “churning,” increases the borrower’s indebtedness while profiting the lender.

Legal Remedies and Enforcement in Illinois

Illinois law provides robust remedies for borrowers affected by usurious and predatory vehicle loans. In addition to the PLPA’s 36% APR cap, consumers can bring private lawsuits to recover damages and penalties. Legal recourse includes restitution, cancellation of unlawful debt, and compensation for emotional distress and lost property due to wrongful repossession.

Under the Illinois Consumer Fraud and Deceptive Business Practices Act, borrowers can also challenge deceptive advertising and misrepresentations related to loan terms. For example, if a lender promises fixed payments but applies an adjustable rate, the borrower may have grounds for a fraud claim.

The Illinois Attorney General’s office continues to pursue enforcement actions against violators. Collaborating with consumer advocacy organizations, the state actively investigates companies that exploit vulnerable borrowers through unfair vehicle loan terms.

The Role of Technology and Lending Practices

FS CORPS believes that with current technology, such as remote vehicle ignition starters or disablers—consumers should not be entering into vehicle loans with interest rates that exceed 12% APR and coupled with reasonable notice provisions for lateness or a failure to pay within a specified grace period, and the consequences would be vehicle immobilization and then repossession.

With technology and insight, Illinois could provide a path for a much lower vehicle loan ceiling of less than 36%.  Frankly, with technology and a far more reasonable vehicle loan ceiling, there are few reasons for vehicle loans to exceed 25% APR and, we would argue, there is no justification for any APR in excess of 12%.

Interest rates greater than 12% are unnecessarily punitive, especially for consumers who rely on their vehicles for work, medical appointments, and essential daily activities. The use of disabler technology strengthens a lender’s position, and this added control calls for fairer, more responsible lending standards.

Comparative Legal Responses to Predatory Vehicle Lending Across States

Predatory vehicle lending is not limited to Illinois. Across the United States, several states have implemented aggressive reforms, regulatory actions, or outright prohibitions to combat high-interest loans and exploitative practices. While legal frameworks vary, the underlying objective remains consistent: to protect economically vulnerable consumers from unjust lending terms.

Here’s how several states are addressing usurious and predatory vehicle lending:

• In California, the state imposes a 36% APR cap on consumer loans under $2,500. However, there is no cap on loans above that threshold, allowing interest rates to climb significantly for larger amounts. The California Department of Financial Protection and Innovation (DFPI) plays an active role in enforcing transparency and reporting requirements, demanding annual disclosures from lenders to monitor default trends and borrower outcomes.
• In Connecticut, interest rates for vehicle loans vary by vehicle age: 15% APR for new vehicles, 17% APR for used vehicles up to two years old, and 19% APR for older used vehicles. These statutory caps aim to protect consumers from excessive loan costs depending on the vehicle’s condition.
• In Florida, auto title lending is permitted, but the state enforces tiered interest rate caps: 30% on the first $2,000, 24% on amounts between $2,000 and $3,000, and 18% on amounts exceeding $3,000. While these limits exist on paper, consumer advocates warn that some lenders restructure loans or apply excessive fees to inflate the effective interest rate. Oversight is handled by the Florida Office of Financial Regulation.
• In Iowa, loans secured by a vehicle title for personal or household use are capped at 21% APR. For regulated loans, a tiered structure allows 36% APR on balances up to $3,000, 24% APR from $3,000 to $8,400, and 18% APR up to $30,000. These laws provide protection against excessive finance charges.
• In Kansas, the Uniform Consumer Credit Code (UCCC) sets a maximum rate of 15% APR for most consumer loans unless otherwise permitted by law. If no rate is specified in writing, the default statutory rate is 10% APR. These rules offer borrowers clarity and protection.
• In Kentucky, the general legal interest rate is 8% APR, but parties may agree in writing to a higher rate. For loans under $15,000, the cap is the lesser of 19% or 4% above the 90-day commercial paper rate. Loans above $15,000 are not subject to an interest cap, allowing for contract-based flexibility.
• In Michigan, lenders operating under the Michigan Credit Reform Act may charge up to 25% APR on vehicle loans. Licensed dealers must also comply with the Michigan Motor Vehicle Sales Finance Act and federal disclosure requirements under the Truth in Lending Act.
• In Minnesota, maximum APRs depend on the vehicle’s model year: 18% for newer vehicles, 19.75% for mid-aged vehicles, and 23.25% for older models. These statutory limits apply to retail installment contracts and override the state’s general usury laws in this context.
• In Missouri, parties can agree to an APR up to 10%, or higher if the “market rate” allows. The market rate is based on U.S. bond yields plus three percent. Loans exceeding permitted rates are considered usurious and subject to penalties.
• In Nebraska, vehicle loans under the Nebraska Installment Loan Act are capped at 24% APR on the first $1,000 of principal and 21% APR on any balance above that. Advance collection of interest is prohibited, and violations may result in mandatory refunds and penalties.
• In New Jersey, the legal interest rate is capped at 30% for individuals and 50% for corporations under the state’s criminal usury law. For unlicensed lenders, the civil usury cap is set at 16%. The New Jersey Department of Banking and Insurance strictly monitors and regulates loan practices, making it difficult for out-of-state predatory lenders to operate without facing enforcement actions.
• In New York, the state maintains some of the most stringent usury laws in the country. Interest rates above 16% are considered civil usury, while loans exceeding 25% APR are classified as criminal usury. Title loans are illegal in New York, and state regulators have pursued legal action against out-of-state and online lenders attempting to operate within the state. These firm restrictions offer some of the strongest consumer protections in the nation.
• In Ohio, vehicle lenders may charge up to 25% APR under various lending statutes. A tiered structure also permits 28% APR on the first $1,000 of the unpaid balance and 22% on amounts above that. Banks and credit unions may set rates up to 25% with certain fee exclusions.

These state-level efforts reflect a patchwork of protections—some robust, others less so. States like New York and California have prioritized strict enforcement and regulatory oversight. Collectively, these approaches highlight the urgent need for comprehensive and stronger state enforcement to close gaps and prevent exploitation across jurisdictions.

Consumer Protections and Advocacy

For Illinois residents, recognizing the signs of an abusive vehicle loan is the first step in safeguarding financial wellbeing. Borrowers who suspect unfair or predatory loan terms should take the following actions:

1. Know Their Rights

Understand that under the Illinois Predatory Loan Prevention Act (PLPA), the maximum allowable interest rate for most vehicle loans is capped at 36% APR, including all associated fees. If you have a vehicle loan between 24% to 36% APR, closely review the miscellaneous charges. Collectively, a vehicle loan that appears “legal” may not be. Borrowers should also be aware of their right to challenge abusive loan terms and pursue legal remedies if a lender violates state lending laws.

2. Review All Loan Documents

Before signing any loan agreement, take time to thoroughly examine all loan terms, including interest rates, repayment schedules, added fees, insurance charges, and prepayment penalties. Look for hidden clauses or ambiguous language. If something is unclear, request clarification or seek assistance before proceeding—once signed, the contract will be asserted by the lender as “binding.”

3. Avoid Verbal Promises

Do not rely on verbal assurances made by loan officers, brokers, or sales representatives. All promises related to payment schedules, interest rates, grace periods, or refinancing options should be clearly stated in writing. If an important term is not included in the contract, it likely will not be enforced in your favor later.

4. Seek Legal Help and Report Violations

If you believe you’re a victim of usurious or predatory vehicle lending, contact FS CORPS immediately. We are dedicated to protecting consumer rights from predatory auto lenders and ensuring that justice is served for those who have been exploited.

In addition to seeking legal counsel, it’s also important to report any suspected violations to the Illinois Attorney General’s Office or the Consumer Financial Protection Bureau (CFPB). These agencies can investigate misconduct, enforce penalties, and assist in recovering financial losses. Acting not only protects your own interests but also helps prevent future abuse of other consumers.

Policy Reform Recommendations

While Illinois has taken meaningful steps to address usurious and predatory vehicle lending through the Predatory Loan Prevention Act, further action is needed to close regulatory gaps, strengthen enforcement, and improve borrower protections. The following recommendations are aimed at policymakers, regulators, and consumer advocates committed to ensuring fair lending practices across the state:

• Mandatory Rate Disclosures in Large Print: Require lenders to display the full annual percentage rate (APR), total repayment amount, and all applicable fees in a large, easy-to-read format on the first page of every loan agreement. Clear and conspicuous disclosure empowers borrowers to make informed decisions and reduces the likelihood of hidden or misunderstood costs.
• Prohibit Prepayment Penalties: Legislation should ban prepayment penalties that discourage borrowers from paying off loans early. These penalties can trap borrowers in long-term debt and unfairly penalize those attempting to regain financial stability. Removing such provisions incentivizes responsible repayment and limits lender overreach.
• Enhance Licensing and Oversight: Illinois should consider more rigorous licensing standards for auto lenders and third-party brokers. This includes mandatory audits, regular reporting of loan performance data, and specific regulatory oversight of technologies like remote vehicle disablers. Strengthening regulatory compliance frameworks would deter misconduct and enable faster intervention when abuses occur.
• Public Awareness Campaigns: Invest in statewide public education campaigns to raise awareness about predatory lending tactics, borrowers’ legal rights, and available consumer protections. Outreach should focus on vulnerable populations—such as low-income, elderly, and minority communities—and include multilingual resources, digital materials, and collaborations with community organizations.
• Statewide Consumer Lending Registry: Establish a public, searchable database of licensed vehicle lenders, including information on filed complaints, resolved disputes, and regulatory actions. Transparency builds accountability and allows borrowers to verify the legitimacy and track record of lenders before entering into agreements.

These policy measures would help reinforce the progress already made under Illinois law and establish a stronger foundation for protecting consumers in the vehicle lending market. As predatory practices evolve, so too must the tools used to detect, prevent, and penalize them.

Conclusion

The threat of high interest and predatory vehicle lending in Illinois is not hypothetical—it is a growing crisis with real consequences for working families and the vulnerable. As illustrated by legal actions in Pennsylvania and beyond, states have the power to fight back. Illinois’ laws provide a foundation, but continued vigilance, enforcement, and public education are necessary to combat usurious practices.

Consumers who have entered into vehicle loan agreements with interest rates exceeding 36% APR should seek legal counsel immediately. Borrowers facing loan terms that are deceptive, confusing, or unaffordable also have rights and legal avenues to pursue meaningful relief. Ensuring accountability and protecting consumer rights must remain central in the effort to end predatory vehicle lending practices.

Vehicle title fraud, such as title washing, title jumping, and duplicate title fraud, can lead to significant legal and financial consequences for buyers. These deceptive practices often involve concealing a vehicle’s true history, including improper ownership transfers, liens, accidents, or salvaged vehicles. You could lose the vehicle to the prior lien holder or person who has been victim of vehicle title fraud, and/or unable to register your newly acquired vehicle.

Please note an important distinction when purchasing used vehicles: when a buyer purchases a vehicle that has an Illinois Certificate of Title, in good faith and for value without notice of any outstanding rights or interests of others, Illinois courts will generally protect the “bona fide purchaser.” If, however, the vehicle has a title outside of Illinois and the buyer then attempts to title and/or register that vehicle and obtain an Illinois title and registration, the Illinois Secretary of State may decline to title or register that vehicle AND Illinois courts may also later protect the out of state registered “owner” or “lien holder” who may have been subject to fraud, theft, title washing, title jumping or duplicate title fraud. Also, any time that you see the legend on the title, DUPLICATE, consider walking away.

This article provides a discussion at how these fraudulent activities occur, offers detailed methods for verifying a vehicle’s title and history, and outlines practical steps to protect yourself during the purchasing process.

Title Washing: What You Need to Know

Title washing refers to the illegal act of altering or concealing a vehicle’s title history to hide its true condition. This deceptive practice often involves moving a vehicle between different states with varying title branding laws to erase salvage or rebuilt status. For instance, a vehicle declared a total loss after an accident might be “washed” to appear as though it has a clean history, misleading unsuspecting buyers.

How to Detect Title Washing:

• Compare State Laws: Familiarize yourself with title branding laws in Illinois and any state where the vehicle has been previously registered. States with less stringent laws may be used as staging points for title washing.
• Use Historical Records: Services like Carfax and AutoCheck provide historical data that can reveal inconsistencies in title status over time.
• Inspect Branding Indicators: Look for signs such as “salvage,” “rebuilt,” or “flood” branding on the title itself or in accompanying records.

Title Jumping: What You Need to Know

Title jumping occurs when a vehicle’s ownership is transferred without proper documentation or state registration. This often happens when sellers seek to avoid paying transfer fees or disclosing liens, leaving buyers with an invalid or incomplete title.

Key Warning Signs of Title Jumping:

• The seller’s name does not appear on the title.
• Claims of a “family friend” or intermediary handling the transaction.
• Sellers pressuring for cash payments or immediate deals.

Steps to Prevent Title Jumping:

• Always verify that the seller’s name matches the name on the title.
• Insist on proper documentation, including proof of identity and ownership.
• Conduct a title check with the Illinois Secretary of State to ensure the title’s legitimacy.

Duplicate Title Fraud: What You Need to Know

Duplicate title fraud involves the creation of a counterfeit or second title for a vehicle. This tactic is often used to facilitate the sale of stolen vehicles or those with unresolved liens. Buyers who fall victim to this scheme may face legal disputes, repossession, or financial liabilities. Fraudsters continually attempt new criminal methods to steal. Whenever a title states “Duplicate,” consider walking away. You could lose the vehicle to the prior lien holder or person who has been victim of vehicle title fraud, and/or unable to register your newly acquired vehicle.

• If an Illinois Certificate of Title states the following: “This is a duplicate certificate and may be subject to the rights of a person under the original certificate.” Consider walking away from purchasing the vehicle. It is possible that the prior lien holder’s interest has been “washed away” or “cleaned” by a prior registered owner and the Certificate of Title appears to be clean but it is not.
• Also, anyone in a police department or the Illinois Secretary of State is immune from liability should you rely on their advice that the “Certificate of Title” is clean.

How to Safeguard Against Duplicate Title Fraud:

• Request the original title from the seller and examine it closely for tampering or irregularities.
• Should the title have the legend, “DUPLICATE” stop and consider another vehicle.
• Verify the title’s authenticity through the Illinois Secretary of State.
• If the IL SOS issued a duplicate title, courts may later extinguish your interest and return the vehicle to a prior lien holder.
• Supplement your checks with third-party services like Carfax, AutoCheck or NICB VINCheck.

Illinois Step-by-Step Guide to Verifying a Vehicle Title

1. Illinois Secretary of State Online Inquiry

• Obtain the VIN: Always request the full Vehicle Identification Number (VIN) from the seller. Refusal to provide this information is a red flag.
• Access the Title and Registration Inquiry Page: Visit the Illinois Secretary of State’s inquiry page.
• Perform the Search: Enter the VIN to retrieve title details. Key elements to check include matching VIN and title number, current odometer reading, title branding (e.g., “original” vs. “salvage”) and presence of any liens.
• If the IL SOS issued a duplicate title, courts may later extinguish your interest and return the vehicle to a prior lien holder.
• Failure to Match: Should any information fail to match with what the seller has presented or told to you, or “Duplicate” or “salvaged,” appear, exercise extreme caution and it would be wise to purchase the added search and potential protection of a Carfax or AutoCheck search result, as well as warranty.
• Any DUPLICATE title can be later awarded to a prior lien holder due to duplicate title fraud. You could lose your interest. And, you have no recovery against the Secretary of State.

2. Visiting an IL SOS Facility

• Arrange to Meet the Seller: Near a Secretary of State facility.
• Ask the IL SOS Staff: To verify the title’s authenticity and provide documentation of their findings.
• Keep Records of the Visit: Including the staff member’s name and any provided information.
• Failure to Match: Should any information fail to match with what the seller has presented or told to you, or “Duplicate” or “salvaged,” appear, exercise extreme caution and it would be wise to purchase the search and potential protection of a Carfax or AutoCheck search result, as well as warranty.
• Any DUPLICATE title can be later awarded to a prior lien holder due to duplicate title fraud. You could lose your interest. And, you have no recovery against the Secretary of State.

3. Additional Verification Methods

• Any DUPLICATE title can be later awarded to a prior lien holder due to duplicate title fraud. You could lose your interest. And, you have no recovery against the Secretary of State.
• Call the IL SOS Office: Dial 800-252-8980 for a phone consultation to verify title information.
• Submit a Written Request: If time permits, send a formal inquiry to the IL SOS. Allow one to two weeks for processing.

The Role of Third-Party Services in Title Verification

Carfax Vehicle History Reports

• Carfax provides extensive information about a vehicle’s history, including accident reports, maintenance records, and previous ownership. While the use of this service incurs a fee, it provides invaluable insights to ensure a vehicle’s legitimacy as well as history. 
• Carfax also advertises that Carfax’s Buyback Guarantee protects consumers from buying a vehicle with a DMV-issued title brand: “The CARFAX Buyback Guarantee helps protect consumers from unknowingly buying a vehicle with a DMV-issued title brand, such as Salvage, Junk, Rebuilt, Fire, Flood, Hail, Lemon/Manufacturer Buyback, Not Actual Mileage, or Exceeds Mechanical Limits. If you find that any of these title problems were reported by a DMV and not included in a report, you may qualify.”

AutoCheck Reports

• AutoCheck complements Carfax by offering additional details on auction history and title branding. It is particularly useful for identifying vehicles involved in multi-state transactions. 
• AutoCheck also provides this service when purchased: “AutoCheck Buyback Protection is a policy that will compensate you by buying back your vehicle under certain circumstances: if the AutoCheck vehicle history report you purchased or received from a dealer has missed a state title brand, when a title brand was reported by the state and provided to Experian, and prior to the date the vehicle history report was run. The purchase price is up to 110% of the J.D. Power NADA guides published retail value PLUS up to $500 in aftermarket accessories.”

NICB VINCheck

• The National Insurance Crime Bureau’s VINCheck is a free tool that identifies vehicles with salvage or theft records. While not as comprehensive as paid services, it serves as a valuable additional step in the verification process.

In my personal purchases, I have utilized all of the above whenever I purchased an out of state vehicle with a title other than Illinois.

Additional State-Specific Title Checks

Florida Vehicles

Florida offers a convenient online service for checking Florida vehicle title and registration details through the Florida Department of Highway Safety and Motor Vehicles (FLHSMV). The Florida Vehicle Title Check allows buyers to verify whether a vehicle has a valid title, check for any liens, and ensure the vehicle hasn’t been reported as stolen or involved in any serious accidents. This service is useful for individuals considering purchasing a vehicle from Florida, as it provides an extra layer of security when verifying title details.

Texas Vehicles

In Texas, the Department of Motor Vehicles (DMV) offers an online service for checking vehicle title and registration information. The Texas Title Check allows you to verify the title status, including whether the vehicle has any outstanding liens or if it’s been reported as a salvage or rebuilt vehicle. You can access this service through the Texas DMV website for a detailed vehicle history.

New York Vehicles

The New York Department of Motor Vehicles (DMV) provides a Title and Registration Lookup tool that lets buyers check the title status of a vehicle. This service is designed to verify if a vehicle is properly titled in New York and whether there are any liens or legal encumbrances associated with the vehicle. It’s essential for anyone considering a purchase in New York to confirm these details before finalizing a transaction.

Florida Vehicles

When purchasing a vehicle from another state, it’s crucial to verify the title status and history specific to that state. Many states offer online tools and services that provide valuable title and registration information, similar to Illinois. By using these resources, you can attempt to discover the legitimacy of the out of state title and avoid potential fraud, including title washing, jumping, or other deceptive practices. Below are key state-specific title check resources for several states across the U.S.

New Jersey Vehicles

The New Jersey Motor Vehicle Commission (MVC) offers a similar service that allows you to check vehicle title information. This includes verifying whether the vehicle has any liens, whether it has been reported as stolen, or if it’s been in any accidents that could affect its value. Checking the title status on the New Jersey MVC website is a crucial step for prospective buyers to ensure a clean history for their vehicle.

California Vehicles

California has made significant strides in digitalizing its vehicle title services. The California Department of Motor Vehicles (DMV) now offers an online service for checking a vehicle’s title and registration status. This tool allows buyers to verify whether the vehicle is clean of any issues, such as outstanding liens, salvage history, or title discrepancies. It’s particularly important for out-of-state buyers to check the title when purchasing vehicles from California.

Conclusion

Vehicle title fraud, including title washing, title jumping, and duplicate title fraud, can cause significant financial loss and legal complications for unsuspecting buyers. Understanding these fraudulent practices and utilizing official channels, like the Illinois Secretary of State’s title and registration inquiry service, as well as third-party services such as Carfax and AutoCheck, can help protect you from such risks.

If you believe you’ve been affected by title fraud or your vehicle has been involved in title washing or title jumping, contact FS CORPS immediately. Our experienced legal team is committed to guiding you through the process, ensuring your consumer rights are protected, and holding wrongdoers accountable for any harm caused. We are dedicated to helping you avoid being taken advantage of as well as recover compensation for any financial damages you’ve incurred.