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Theft by fraud or conversion: What can you do to protect yourself?

By Connie Lannan

April 30, 2024

Detective Sgt. James Dietz

It happens far too often. A customer comes in, rents your equipment and never returns it despite repeated attempts to reach them. Or, unbeknownst to you, a customer walks out the door with your equipment by using a fake ID and stolen credit card. Now you are left trying to pick up the pieces and hopefully recover your equipment.

What can you do to help prevent these thefts from happening? If your equipment is stolen, what steps do you need to take to assist in recovering that equipment?

You need to have a multi-pronged approach, according to Detective Sgt. James Dietz, a two-time recipient of the ARA Insurance/National Equipment Register (NER) Award who recently retired from the Michigan State Police SCAR (Southwest Commercial Auto Recovery) Unit, Kalamazoo, Mich. He played a key role in setting up sting operations, primarily in Michigan and Ohio, that resulted in the recovery of more than $1 million in rental equipment as well as the arrest and conviction of 10 people.

First, make sure your counter staff know the major red flags.

Red flags could indicate a potential issue, particularly if more than one occurs during the rental transaction, Dietz says. Click here for those that should put you on high alert.

Place your equipment on the National Equipment Register (NER).

“Heavy equipment is special,” Dietz says. “Whereas there are the Department of Motor Vehicles and your secretary of state to deal with automobiles, NER deals with heavy equipment. They are a great tool and resource for law enforcement in case your equipment is stolen. They keep track of all the equipment and the owners that have been reported to them. They help law enforcement identify equipment.”

Dietz remembers when he found some stolen equipment that had the product identification numbers (PIN) or serial numbers ground off. “When I have contacted NER, they provided us information on other places to look or things to look for to identify this specific piece of equipment. There might be an owner-applied number. NER keeps track of those, too. They also offer theft alerts to rental operators and law enforcement,” he says.

American Rental Association members may register up to 1,000 pieces of their off-road, mobile equipment on the NER HELPtech database for free — all as a benefit of membership.

Establish a relationship with your local police department and/or state police task force.

“You need to reach out to your local agencies or the agencies that are in your cover area. Find out who investigates property crimes, whether it’s a single detective or a unit. Let them know the issues you’re up against,” Dietz says, adding that law enforcement officers who don’t normally deal with heavy equipment theft might not be aware of the issues facing your business.

If you have a state police task force, that is another great resource. “Task forces are usually a multi-jurisdictional team that can draw officers from local, county, state and federal agencies to create one unit. And they’re a little more capable of dealing with theft rings vs. your everyday failed to return,” he says.

If you have suspicions, save important information appropriately.

For every rental, you need to receive a valid state ID, driver’s license and valid credit card. While there are laws against saving personal information on your computer or electronic devices, Dietz does suggest that if you have suspicions about a particular rental transaction, you might want to save a photocopy of the pertinent information in a secure paper file that can be disposed of when appropriate.

Why? “Because law enforcement will need a copy of that if you have an issue. Law enforcement needs all 16 digits of the credit card. We can get it, but it will take more time and several search warrants. If you don’t feel comfortable with that, just write the 16-digit number down, whether it’s a Visa, MasterCard or the name of the bank for whatever credit card. Because if you have credit card fraud, you have another victim now — the victim whose card was stolen,” he says.

You’ve been hit, what is the first action to take?

“First, check your rental contract. If it is a fail to return situation, the reporting times may be a little different,” Dietz says. “There are also laws on the books regarding rental theft, whether it’s fraud or fail to return. So just double-check your state laws.”

With fail to return, “a lot of states require that you send out a letter of demand prior to filing a police report. So if that hasn’t been done, you need to do that before you file a police report because they will be asking for that. Make a copy of the letter for yourself and get that to the police as well,” he says.

In addition, “have you made any attempts to contact the individual who rented the equipment? If so, you need to document those attempts. Did you look to see whether the job-site location was valid? All the little things like that you need to document to show law enforcement that you tried to get your equipment back and they are not complying. Also, make sure that for the equipment you are missing you have the correct numbers for it so you can provide that to law enforcement,” he adds.

File a police report.

“Do this immediately if it’s theft by fraud. If it is a fail to return, wait until the contract is up. Fraud is going to be a fraudulent credit card, a fake driver’s license and there’s going to be other issues that go along with that. You can always explain to law enforcement, ‘Listen, this is why I’m reporting it now. I’ve tried to contact that number, but it has been disconnected. I went up to the job site and it’s bogus.’ If there have been other thefts in the area, share what you have heard as it might be part of a theft ring. Provide all that to law enforcement so they can get moving on the investigation,” Dietz says.

Another reason for promptly filing a police report is that criminals who fraudulently rent equipment may report it stolen before the actual owner has the chance. “They might claim, ‘I intended to return it, but it was stolen from me.’ This complicates matters for both the store owner and law enforcement because the same item cannot be reported stolen by two different parties,” he says.

If you have questions about how to file a theft report, turn to ARA’s new Theft Reporting Guide. Access this free guide that offers a step-by-step process for you to follow. Questions? Contact membership@ararental.org.

Share what happened with your area rental operators.

Communication between the rental companies is important, Dietz notes. “If you have a business and somebody comes in and attempts to rent something from you fraudulently or maybe they do get away with it, obviously first you have to report it to law enforcement, but then at least pass it on to your surrounding businesses. Don’t send personal information, but you can describe what happened to give your rental colleagues a heads up. You know that if you turned the thieves away they will go down the road to the next rental operation,” he says.

Learn more prevention tips and hear one rental operator’s story.

Gary Booms, president, Booms Rent-All, Bad Axe, Mich., had a heart-pounding experience when thieves were trying to steal his equipment. Discover what happened and learn more tips when Booms and Dietz join in an insightful conversation with Andy Dresher, ARA education and training manager — all part of the ARA Live Panel: Equipment Theft, Prevention and Recovery. Access it for free now.