After turning the machine over to the authorities, the good-faith buyer was told by the auctioneer that he would be reimbursed for the price of the unit only upon the auctioneer recouping the money from the seller. That left the unfortunate buyer stuck with a thousand dollar delivery bill, which the auctioneer refused to cover, and several months of wait time to receive his purchase amount back. In the meantime, the investigation uncovered that the stolen unit had been sold, financed and insured several times since the day of its original theft in 2003. Consequently, all the owners, lenders, insurers and auctioneers that bought, sold, financed or insured this machine were now a part of the police investigation and, likely, facing potential financial and reputational loses.

This story is not uncommon, and while used equipment due-diligence is often overlooked by most industry players, the possibility of buying a stolen machine remains very real. Theft is on the rise and, by most estimates, it accounts for approximately fifty percent of all heavy equipment losses, and costs in the neighborhood of one billion dollars a year. The current economic climate is likely to deepen this problem as more individuals are choosing illegal means to supplement their income. Even some employees, feeling frustrated about lost perks and benefits, may try to “make-up” for those losses by helping themselves to something from their employers, and “inside jobs” are estimated to account for nearly fifty percent of all reported theft losses.

Low risk of detection, arrest and conviction is among the primary motivations for equipment thieves. The thieves are also emboldened by the fact that law enforcement officers, caught between the complexity of equipment investigations and the more pressing assignments, often view equipment cases as low priority. Additionally, non-standard placement and formatting of equipment serial numbers or Product Identification Numbers (PINs) and the lack of DMV records that can verify legal ownership of the equipment before the theft has been discovered make such investigations especially lengthy and difficult.

But there is even more. Being easy to steal (one key usually fits multiple machines) and very easy to sell (in most states, heavy equipment can change owners with little more than a handshake), generators, skid steers, backhoes and tractors are likely to remain at the top of most thieves’ wish list. Once stolen, the equipment typically makes its way back into the used market in the United States, and although some machines will be exported, most will be sold by thieves in a nearby city or town.

So what can equipment owners and buyers do to prevent theft and avoid purchasing stolen equipment? David Mossman, Senior Equipment Analyst at the National Equipment Register (NER), encourages owners to not let their machines be an easy target for thieves: “Anything you can do that increases the time and effort required to move your equipment may make a thief think twice. Block the equipment in, booms down and turned, gas tanks facing the street (to thwart diesel gas theft), and keep a well lit site.” He also recommends ignition or hydraulic devices that make it nearly impossible for a thief to move a piece of equipment. And, if the budget allows, it is a good idea to install a GPS system that will warn the owner when the machine is being moved. Finally, Mr. Mossman stresses the importance of good record keeping by owners: “All serial numbers or Product Identification Numbers (PINs) should be recorded, kept up-to-date in a safe location and readily available to those in charge of the machines.”

The latter advice can easily apply to all used equipment market players as sketchy record keeping and poor due-diligence consistently lay financial and reputational traps not just for equipment owners, but also for lenders, auctioneers, dealers and insurance carriers. The aforementioned Caterpillar 936 wheel loader story is not unusual, and countless of good-faith equipment buyers are confronted with similar circumstances every day. To help owners, lenders and auctioneers to reduce the risk of acquiring a stolen machine, NER has introduced a new service called IRONcheckPLUS. It is the quickest and most comprehensive equipment background search that covers theft, lien status, ownership and insurance history on equipment, and can be conducted based strictly on equipment’s serial number or PIN.

Information about IRONcheckPLUS searches as well as other tips and tools for protecting against equipment theft can be found on www.StopEquipmentTheft.com