Holes in Monitoring System Let Lemons Get Resold Morning Edition, January 31, 2006 =B7 Thousands of vehicles that sat in the murky waters left by hurricanes Katrina and Rita are starting to show up on the used-car market. Most states require that flooded cars be labeled as such on the title. But scam artists have found loopholes in the system. They re-register cars in states with looser title laws -- sometimes two or three states
-- until the warning that the car was flooded is gone. This fraudulent practice is known as "title washing." In 1992, Congress passed a law designed to stop the practice of title washing, but it was never fully implemented. The National Motor Vehicle Title Information System (NMVTIS) was designed to offer car history reports, as well as other information not available from commercial companies -- such as valuable data derived from insurance claims. Advocates say the program would save both consumers and the government money -- money that might otherwise be spent investigating title fraud. But NMVTIS has been crippled. Consumer advocates say one big reason is opposition from commercial interests that profit from title washing. More at