A growing concern in the Canadian automotive industry

According to the Canadian Anti-Fraud Centre, which tracks fraud trends across the country, there were 109 reported cases of vehicle identity fraud in Canada in 2020, resulting in losses of over $1.2 million. 2 This represents a 13% increase from the previous year .2 CARFAX Canada has also seen a similar trend, reporting a 30% increase in VIN cloning investigations since 2020.3

The impact of VIN cloning is significant and negatively affects consumers, insurance companies and the automotive industry. Consumers who unintentionally purchase a vehicle with a cloned VIN can face a variety of problems including vehicle safety concerns, reduced resale values, and potential legal issues. In some cases, buyers may be subject to fraud charges if they unknowingly participate in the illegal sale of a cloned vehicle. If the vehicle is repossessed, the new owner of the stolen vehicle incurs the loss of the assets, and may also be liable for any outstanding loans on the vehicle.

For insurance companies, lenders, and the government, VIN cloning can result in increased insurance premiums, defaulted loan payments, and missed tax payments. Additionally, insurance companies can potentially end up paying twice on the same VIN; once on the stolen vehicle and again on the cloned VIN if both owners make a claim. According to a report published by the Insurance Bureau of Canada, insurance fraud (including vehicle identity fraud) was estimated to cost Canadians up to $2 billion annually in increased premiums and other costs.4