Back

Fraud alert: Protect your business from fraudulent vehicle lien discharges 

November 13, 2026
Dealer Bulletins

Dear Registrants,

OMVIC is alerting registered dealers to fraud risk involving the removal of legitimate liens from vehicles. This activity can make vehicles appear free of outstanding liens, putting dealers, lenders and consumers at financial and legal risk.

How fraudulent lien discharges put dealers at risk

In some cases, a legitimate lien may be fraudulently removed from a vehicle’s record, allowing it to be resold without an apparent outstanding lien. Unsuspecting dealers may then purchase or accept these vehicles in trade (e.g. through an auction, wholesale transaction or consumer trade-in), unaware that a lender still has a secured interest.

Dealers should proactively verify vehicle ownership and lien information before acquiring a vehicle, not just before selling it.

Steps dealers can take to protect their business

  1. Verify the seller: Confirm the seller’s identity and authority to sell the vehicle.
  2. Check ownership: Review vehicle ownership history and documents for veracity.
  3. Review lien information: Exercise additional due diligence when a lien search identifies an unusual or recently discharged lien. Consider contacting the previous lienholder directly to independently verify that the lien discharge is legitimate.
  4. Investigate inconsistencies: Look for differences between ownership documents, lien records, vehicle history and seller information.
  5. Keep complete records: Retain documentation supporting the acquisition and the due diligence undertaken by the dealership.

Stay vigilant when acquiring vehicles

Dealers are encouraged to review their vehicle acquisition procedures with staff and remain alert to unusual lien activity. Taking appropriate steps before acquiring vehicles can help protect your business, and ultimately consumers, from potential fraud.

If you have questions regarding this dealer bulletin, please contact OMVIC’s Industry Standards & Conduct department. To report suspected illegal activity in vehicle transactions, contact your local police service. For more information on dealer financial compliance requirements, please refer to OMVIC’s Financial Responsibilities and Obligations Guideline.