January 30, 2004

Detroit. The Michigan State Police is warning citizens about a growing vehicle leasing scam that is being reported in Metro Detroit that could have a devastating effect on a person's credit rating.

Persons with excellent credit ratings are offered a proposition of purchasing motor vehicles and making a profit by leasing them to a third party. The offer is usually presented by an employee of a small finance or loan agency after the victim applies to refinance a home. Several high-priced vehicles are then purchased or leased in the name of the victim in a short period of time. This usually occurs before the first vehicle even appears on the victim’s credit report.

The vehicles are then leased by the perpetrator to a third party who would not have been able to obtain financing to purchase the car on their own. The third party pays the perpetrator a monthly payment exceeding the victim’s monthly payment to the finance company, and the victim is promised a percentage difference.

Eventually, payments from the third party are not received or the vehicle is declared a loss after being involved in a traffic crash or stolen. The victim is then left with the responsibility to pay the finance company for the total owed on the vehicle(s) and any other potential liabilities resulting from a crash since the vehicle is in his/her name. The end result is usually a ruined credit history for the victim.

The Michigan State Police cautions citizens against becoming involved in such transactions and reminds citizens that if something sounds too good to be true, it probably is.