•• • •

Hamilton. July II. 200N

MA,RQUAGE A N Tl " O L SHERLOCK INC Mr. Willie Handle r

Senio r Manager. Auto mo bile Insurance Poli cy Unit. Fina ncia l Services Commission of Ontario 5160 Yonge Street. 15th Floor. Box 85 Toronto. Ontario. M2N 61.9

" "H Q.- Rc: Ontario Auto Insurance Five Year Review

• Dear Mr. Handler.

, 450 614 6 According to the Insurance Bureau of Canada (lBe) "Automobile theft is much " mo re than an insurance problem; it's an expensive socia l menace. Every year

automobile the ft costs Canadians close to $ 1 billion. including $600 mi llion for insurers to fix or repl ace sto len cars. $25 0 million in pol ice. health ca re and court system costs and millions more in correc tional services." (Appendix # 1) Current estimates show that approximately 50 percent of the thetis in Canada occur in Ontario and cost the Property and Casualty (P&C) Insurance Industry' and ultimately the Insurance Consumer of Ontario over $200 million annuall y. As documented by Statistics Canada and the RCt\,1P. the national rate o f a uto theft is 56% higher today than 20 years ago . and is rapidly shifting away from bei ng a random act toward organized crime rings.

The Government in Ontario is al so very concerned that fraud and abuse have become a significant factor in rising au tomobile insurance prem iums. ThL.' me has est imated that at least 15 per cent of Ontario vehicle premiums arc di rectly attr ibutable to costs incurred due to fraud and au to theft. The On tar io Cr ime Control Commission supports this figure. In 2006. 38398 vehicl es were stole n in Ontario and 38.821 in Quebec. In the past me states Ontario recovered 90 per cent of its sto len vehicles. but today it's onl y 70 per cent. The recovery rate in Quebec is only about 50 per cent

However. contrary' to other provinces such as Quebec. the Insurance Consumer o f Ontario . in general. docs not benefit from premium discounts \\ hen they purchase after market theft deterrents to protect their investment. At present Ontario con sumers obtain a premium d iscount if their vehicle is equipped with an approved mc immobilizer and some Insurers do prov ide small premium di sco unts for individ uals who insta ll afte rmarket the ft preventive or tracking

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In the fight to deter theft, the immobi lizer is now mandatory equipment on all vehicles in Canada produced after Sep tember 2007. The immobilizer is VCr)

effec tive method in preventin g thefts of co nvenience (joy- rides) hut docs veT) little to deter the theft of vehicles by organized criminal groups who steal them for re-sale, to he dismantled for parts or exported to other count ries ove rseas.

As ment ioned at present some insurers do give small discounts for particular after market deterrent systems hut most consumers do not feel the investment in such systems and the small discounts that are allotted justify the cost and effort required to have such systems installed. The Insurers on the other hand state that some: o f the: present rsco guidelines and lor regulations deter them from giving larger discounts for effective vehicle theft deterrent s. The present situat ion docs little: to help prevent vehicle thefts in Ontario and ultimately docs not help red uce premiums for the Ontario consumer.

In orde r to help dete r vehicle thefts in Ontario we suggest that consideration should be given to allowing the Ontario P & C Insurers the latitude to give appropriate premium discounts on recommend and proven effective aftermarket theft deterrent systems. These discounts cou ld be given on policies on high-risk vehicles (Such as those listed on the me Annual Top Ten Most Stolen Cars ­Appendix # I.). This would have a three (Jj-prong effect:

1) I leip reduce vehicl e theft 2) Reduce: the overal l cost of theft to Insurers 3) Reduce premi ums to Ontario Consumers

There arc various theft deterrents on the market with varying degrees of effectiveness. Ove r the past several years the Canadian Co uncil of Motor Transpo rt Administrators (CC MTA) through its Drivers and Vehicles Co mmi ttee has produced a co mprehensive study on various ways to prevent vehicle then. This study "The Best Practice Model s for Combating Auto Th eft' (Appendix #2) was approved on October 3 1. 2006 and revised in Nove mber 20U7. This document out lines various methods and systems that can effectively be used in combating "chicle theft and related frauds. One of the most effective methods. mentioned in the report. is Intensive Parts Marking detailed on page 14 of the report. The Sherlock Antitheft Marking Inc. (Sherlock), which was established twen ty-five years ago markets and se lls this method in Quebec. Ontario and the At lantic Provinces. In Quebec stud ies have proven that intensivel y marking a vehicle does deter the ft and therefore helps insurers 10

control premium costs on the comprehensive portion of a policy. A great majori ty of Insurers in Quebec give premium discounts and in some cases pay lor the install ation of the system or make it mandatory. The Automobile Protection Association (APA) recommends the Sherlock Intensive Marking process as the most effective deterrent against vehicle theft.

It should also be noted that Insurance Information Inc. in the United Slate s reports that in nine (Q) states regu lations require insurers to provide car 0\\ ncrs who equip thei r au tomobiles with anti -theft devices and/or systems with discount rang ing from 15 10 36 percent on the compre hensive port ion of the po licy. (www.iii.org/mcdia/h ottopics/insurancc/tcst-l/ )

In conclusion. it would be beneficial for the: insurance consumer of Ontario if FSeO would adopt a policy that would enable the P&C Insure rs of Ontario to provide premium discounts or premium credits for consumers that have approved or recommended anti -theft deterrents on their "chicles. If you require any further detail s on our proposal o r thc Sherlock Intensive Marking System. I am ava ilable to meet you and or members o f the committee involved in the Fin' Year rev iew of Pan Vi ol' the Insurance Act.

E~~ GeTT)' Garand Manager. Business Development (Ontario) Sherlock Antitheft Marking Inc. 107 Ewen Rd. Hamil ton. Ontario - L8S 3C3

Cc : Pierre-Pau l Jodoin - President Sherlock A ntitheft Marking Inc. And re Drolet - National Director Business Development - Sherlock Antitheft Marking Inc.

APPENDIX # 1

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Top 10 Most Stolen Cars

Automobile theft is much more than an insurance problem; it's an expensive social menace. Every year automobile theft costs Canadians close to $1 billion, including $600 million for insurers to fix or replace stolen cars, $250 million in police. health care and court system costs and millions more in correctional services expenses.

Thieves generally steal cars for one of four reasons :

1. Fo r s ale ab road - Within an hour of its theft and wit h its VIN still intact, the car is packed in a shipping container and sent abroad with fa lse export documents. Stolen cars are shipped to Eastern Europe, Russia , the Middle East , South America , the Caribbean. Africa and Southeast Asia . Upon arrival , these stolen vehicles are sold for many times their original market va lue .

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2. For sale to unsuspecting consumers - The vehicle may be given a new identity wIth a false vehicle identification number (YIN) to hide its origin . 1t will then often be sold to unsuspecting consumers . It also can be dismantled and sold for parts.

3. To get somewhere - This is more commonly, but inappropriately. referred to as "Joyriding: but auto theft , of any kind or wi th any intention. is still a crime and innocent people do get hun or killed .

4. To com m it another crime - Why would a thief use his or her own vehicle when he or she can steal one and use it? These cars are often recovered - abandoned and badly damaged - within 48 hours.

And th e thieves have favourite cars too.

Every year, IBC publishes a list called " The Top 10 Most Stolen Cars." See if your car is a potential target.

2007 I 2006 I 2005 I 2004 I 20Q3

How often your make and model of car is stolen is one of the factors insurers use to set your insurance premium. It's a good idea to check out these lists, as well as the publication. How Cars Mea sure Up: How theft, col lision and other claims affect the cost 01your car insurance .y,;. j

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Top 10 Most Stolen Cars - 2007

Hon da Civics again at top of Canada 's Top Ten Stolen Vehicles list: List i ll ustrates new trends in organized auto theft

December 19 • 2007

Toronto - Canada's car insurers announced today that the 1999 and 2000 Honda Civic SiR 2-door have topped the list of the most frequently sto len vehicles for the third year in a row. These two models also appear in the list of highest theft claims costs per vehicle, as number three and number five , respectively . The 2004 Subaru Impreza WRXNt/RX STi 4-door all ­wheel-drive comes in third place on the most frequently sto len list , and 'wins" the number one spot on the highest theft claims costs list.

The Top Ten Sto len Veh ic les are :

1. 1999 Honda Civic SiR z-coor 2. 2000 Honda Civic SiR 2-door 3. 2004 Subaru lmpreza WRXflNRX STi 4-door AWD 4. 1999 Acura Integra 2-door 5. 1994 Dodge/Plymouth Grand Carava nNoyager 6. 1994 Dodge/Plymouth Grand CaravanNoyager AWO 7. 1994 Dodge/Plymouth CaravanNoyager 8 . 1998 Acura Integra 2-door 9. 2000 Audi IT Quattro 2-door Coupe

10 . 1994 Dodge/Plymouth ShadowlSundance z-ooor Hatchback

As in previous years , none of the top ten on the most frequently sto len list had an electronic immobilizer meeting the Nat ional Standard of Canada (ULC -S338198) . Immobilizers meeting this standard cut three vital circuits - the starter, the ign ition and the fuel. On September 1, 2007 , a new federal regu lation took effect requiring Ca nadian manufacturers to equip all new cars , vans, light trucks and SUVs with electronic immobilizers.

~We all know that immobilizers are effective at reducing auto theft. Their effectiveness has been backed up by numbers year after year.' said Rick Dubin, Vice-President , Inves tigations , Insurance Bureau of Canada (IBC). "Honda Civics are a good example. Newer year models in wh ich Honda did install immobilizers meeting the National Standard of Canada appear much lower on the list."

IBC investigations and the recovery of stolen vehicles over the past few years illustrate an alarming trend that is becoming all -too prevalent in Canada. Organized auto theft rings are targeting high -end or desirable vehicles wi th the intention of exporting them overseas or chopping them for parts .

In that regard , the 2007 list shows three 2001 Audi Quattro models appearing in the top 30 most frequently stolen vehicles

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Top 1() Sto len Cars - 2007

' These models have moved up an average of 26 spots from their posit ions in the 2006 list, showing that the relative demand for these high-end, desirable models is increasinq ." said Dubin.

Also increasing in frequency are thefts of newer 4-wheel drive vehicles. IBC investigators have observed that these utility vehicles are often exported to countries with rough terrain, such as those in the Middle East and Africa

Dubin said, "IBC has been very successful in repatriating many of these high-end stolen vehicles from overseas, but more needs to be done to prevent Canadian vehicles from being stolen and exported in the first place ."

Recognizing that auto theft is a serious and violent crime, IBC is urging the federa l government to pass Bill C-343, which wou ld act as a deterrent by making auto theft a separate offence under the Criminal Code. IBC also continues to advocate partnerships with local law enforcement and a dedicated presence of Canada Border Services Agency and IBC at key Canadian ports to help stop stolen vehicles from leaving the country .

"Auto theft costs Canadians more than $1 billion a year and all too often leads to the serious injury and/or dea ths of innocent Canadians. This is not just a property crime. It is a safely and security issue for all Canadians. Auto theft has been shown to support organized crime and is believed to fund terrorism." said Dubin,

The Least Stolen Vehi cl es were:

1. (tie) 2003 Buick Le Sabre 4-door 2. (tie) 2003 Cadi llac Dev ille 4-door 3. (tie) 2002 Ford/Mercury Crown Victoria/Gra nd Marquis 4-door 4. (tie) 2000 Satum SW1 Wagon 5. (tIe) 2000 Lincoln Continental 4-door 6. (t.e) 2000 Volvo 670 4-door 7. (tie) 1998 Hyundai Accent a-door 8. (tie) 1997 Buick Regal 4-door 9. (tie) 1996 Buick Park Avenue 4-door

10. 2001 Toyota Highlander 4-door 2WD

The data on stolen vehicle frequency is based wholly on actual insurance claims information collected from com panies that write almost 100% of all automobile insurance in Canada. This data can be found in the 2007 release of IBC's "How Cars Measure Up: which compares the insurance claims records of the most popular models of cars. passenger vans, SUVs and pickup trucks across the country , Consume rs can also access information on the best and worst models according to collision, comprehensive and theft claims cost experience . This information can be extremely useful to consumers before they actually buy either a new or used car. "How Cars Measure up' is designed to help consumers understand how theft , collision and other claims costs affect insurance premiums. For more information , visit IBC's website at www.ibc.ca and click on "How Cars Measure Up" under "Quick Links."

Insurance Bureau of Canada is the national trade associ ation of the property and casualty insurance industry. Its memb er companies provide nearly 95% of the private home, car and business insurance sold in Canada,

-30­

For more information or to arrange an interview with Rick Dubin , Vice-President, Investigations, IBC, please contact Ellen Woodger at 416-483-2358 or James Geuzebroek

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CCMTA Best Practice Models for

Combating Auto Theft

Version 6.1

October 2006

(Revised November 2007)

Prepared for CCMTA

By Anti Auto-Theft Project Group

Best Pract ice Models for Combating Auto Theft

Table of Contents

1 Introduction . 3

2 Problem Statement . .. ..4

3 Project Group ...5

4 Best Practice Models....... . ._._ _. _. 6

Best practice model for registering out of jurisdiction vehicles .......................... 6

Best practice model for enforcement initiatives .. 7

Best practice model for use of auto theft devices .._ _ _ 10

Best practice model for young recidivist car theft offender programs 11

Best practice model to ensure secure idennncanon of motor vehicles 12

Best practice model to create high public awareness 15

Best practice model for vehicle inspection programs 16

Best practice model to safeguard against identity theft _ _._ ._._ ._ ._ _.......................... 17

5 References 18

November 15. 2007 Page 2 of 18

1

Bes t Practice Models for Combati ng Auto Theft

Introduction

Best pract ice models draw on the lessons learned from the review and evatuato n of similar successful projects and are informed by research and the wider literature on best practce approaches ,

This document will address the issue of stolen vehicles and suggest the best practice models to reduce vehicle theft . to fulfill the remaining item of the Ant i Auto-Theft Project Group mandate

As background , on October 29.2001. Canadian Council of Motor Transport Administrators (CCMTA) held a special session to address the issue of stolen vehicles and the role provmciasterntona! vehicle registrars could play in reducing vehicle theft , Seventeen prionty items were identified from the session . Four areas were selected as items that registrars and CCMTA could address and make positive changes '

• Identify potential stakeholders and develop an infrastructure to facilitate the exchange of data and expertise.

• Develop national standard procedures for registering out of jurisdiction vehicles to produce a standard best practices guidelines document

• Review the CCMTA Stolen and Wrecked Vehicle program to ensure Jurisdictions are compliant and to recommend any changes or improvement to the program and potentially update the agreement

• Eva luate the mandatory use of IRE by all Canad ian jurisdictions

November 15. 2007 Page J of 18

Best Practi ce Models for Combating Auto Theft

2 Problem Statement

In Canada in 2004 , approxImately 180,000 incidents of motor vehicle theft were reported to police - an average of 493 vehicles a day .

Automobile theft IS much more than an Insurance problem ; It'S an expensive social menace that every year costs Canadians close 10$1 billion : $600 mllhon for Insurers to fix or replace stolen cars , $250 million in police , health care and court system costs , and many more millions of dollars In correctional services expenses 1

The auto theft issue defies all boundaries: jurisdictional, ootmcal. geographical or administrative Because of the changing Irends and comp lexity of the issue, the auto theft fight requires the cooperation and involvement of many stakeholders.

As the vehicle theft landscape continues to evolve , so must the search for innovative solutions to combat the activities of determined vehicle thieves

What happens to a stolen car?

A stolen vehicle generally meets one of four fates

1 It may be dismantled completely or partially for parts , 2. It may be given a new idennty with a false Vehicle ldentmcanon Number (VIN). To hide the car 's

Origin, It win then be transferred to another province or to the umted States for sale 3. It may be packed in a shipping container and sent abroad with false export documents 4 It may be taken for transportation or used in the commission of a crime

1 Except from the Insurance Bureau of Canada's websue - Report on Auto Theft - August 2006

November 15,2007 Page 4 of 18

3

Best Practi ce Models fo r Combating Auto Theft

Project Group The Canad ian Council of Motor Transport Administrators is an organization established by the provincial, territorial and federal govemments and related agencies to act as a neutral and independent coordinating body in all matters dealing with the administration, regulation and control of motor vehicle transportation and highway safety. Since 1993. private organizations have had the opportunity to become associate members of CCMTA.

The CCMTA includes three separate and distinct standing committees to accomplish its objectives. The committees are Drivers and Vehicles, Compliance and Regulatory Affairs , and Road Safety Research and Policies The Anti Auto Theft Project group reports 10 the Drivers and Vehicles Standing Committee. This committee will continue to provide a forum for discussion and introduction of new ideas and strateg ies as they relate to auto theft

The project group has worked actively with police , insurers . the motor trades . vehicle manufacturers. registration authorities and justice agencies to produce a range of best practice models to reduce vehicle theft . A dec ision regarding implementation of the models is up to the individual jurisdiction. as each will be faced with issues of competing priorities for available resources , Additionally , the demographics relating to the auto theft problem may vary from jurisdiction to jurisdiction.

The anticipated outcome of the implementation of the models is to make vehicles more difficult to steal. close the loopholes that professional thieves exploit . improve the flow of police and reqistranon information nationally . and lead young offenders away from vehicle theft . As the dynamics of vehicle theft invariably change over time. the group will remain open to new strategies and amend or add to this document

November 15, 2007 Page 5 of 18

Best Practi ce Mod el s for Combating Auto Theft

4 Best Practice Models

Best practice model for reg istering out of jurisdiction veh icles

Registration authorities can take an active role in reducing vehicle theft by making it more difficult for cnmmels 10 fraudulently register stolen vehicles . Registration authorities need the support and ongoing commitment of key stakeholders such as Insurers, motor trade orqaruzanons. automobile associations . law enforcement. government agencies. and vehicle manufacturers

Ideally, all jurisdictions should standardize registration procedures (e.g proof of identrty and proof of entitlement) and require compulsory noti fication of written off vehicles .

Some suggestion to standardize registration procedures are :

1. Ensure all foreign vehicles go through the Registrar of Imported Vehicles Inspection Program before the vehicle is registered in Canada

2. Accept only original documents required for registration.

3 Establish a process to record and verify odometer readings

4 Car dealers should not be permuted to register or transfer vehicles online, unless appropriate and effective audit processes are in place

5. Capture all intormano n from temporary reqetrencn permits on a database

6 Ensure Canadian computer systems decode the VIN to ensure il is a valid number.

7 Complete an exploded IRE search" of all out of junsdiction vetucles (The lnterprovtncat Record Exchange (IRE) ISa network developed and managed by CCMTA, wtncn connects the driver and vehicle databases of all Canadian junsdcnon molor vehicle departments. to provide for the electronic exchange of information between these jurisoicnons.)

8 Disallow the active registration of the same vehicle in multiple jurisdictions. This can be achieved through preventing duplicate VINs , by junsdictions that track vehicles by VIN Additionally . a procedure should be In place to address this issue if it arises when registration is requested .

9 . Physically inspect every out of jurisdiction vehicle to verify V IN integrity and documentation . All out of province vehicles . rebuilt vehicles, and salvaged vehicles should be checked by qualified inspectors trained in vehicle identification and re-numbering methods.

An altemauve would be targeted identity and safety inspections of high risk vehicles . High nsk vehicles include

• repairable written-off vehicles

• vehicles with damaged or missing identrhers

• personal imports

• rebuilt vehcles

• stolen or recovered vehicles

10 Ensure the database of stolen vehicles is checked for every reqrstranon

• The exploded search allows for a check of all junsdictions and . since October 2006, RIV , CPIC Stolen Vehicles and Insurance Bureau of Canada

No....ember 15. 2007 Page 6 of 18

Best Pra ctic e Models fo r Combating Auto Th eft

Best practice model for enforcement initiatives

Ded icated Law Enforcement Auto Theft Teams

Implement junsdcnooaltaw enforcement teams focused specifically 10develop strategies to reduce auto cnme. The teams would oversee and coordinate all law enforcement activities relallng to combating auto theft The teams would consist of independent mumcpar departments, law enforcement agencies . and insurance investigators The emphasis would be organized cnme investigations such as chop shops , re ­VINing, vehicle identrtcenons. exporting . and fraudulent claims and targeted enforcement.

Street Enforcement Teams

These tactical surveillance teams would :

• Identify and apprehend dangerous and prohftc car thieves • Work Joint forces operations with othe r police agency's auto theft sections or property crime

teams • Conduct surveillance until the suspects exrt the vehicle before making an arrest thereby

eliminating vehicle pursuits and rammings • Attempt to disable by pulling spark plug wires or fuel fuses prior to departure • Use "show cause" reports to have offenders remanded in custody until trial • Use various toots such as night vision . infrared cameras and flashers. and covert GPS to assist In

surveillance

The dedicated law enforcement auto theft teams should have full-lime media relahons officers who : • Ensure that auto theft awareness . education, and prevention remain in the forefront of public

attention • Develop and implement proactive communication strategies • Conduct press conferences and media bneflngs • Represent the learns at special events • Coordinate media releases and events for provincial aula come related programs • Work in partnership With Internal and external partners

Pol ice Traffic Heli copters

Police traffic heucopters are an invaluable tool to reduce auto crime. They are used in pursuits, street racing, impaired driving, auto crime. and other high fisk cnmmal offences.

Bait Cars

A bait car is a generic term used for a vehicle that has been rigged by a law enforcement agency With the intent of capturing car thieves Special features include bullet-proof glass: automatic door locks : video cameras that record audio. time . and date; and the ability 10disable Ihe engme remotely. The practice does not violate entrapment laws, since the suspect is not persuaded to steat the vehicle by any means other than their own motivation. The bait car is a phenomenon in the study of criminal behavior since it offers a rare glimpse Into the actions and reactions of a suspect before, during and after the crime _Unlike other crimes caught on surveillance cameras. suspects at least initially believe and react as If the come has been successful, until the bait car is retrieved 2

2 wlklpedia.org

November 15, 2007 Page 7 of 18

Best Practice Models for Combat ing Au to Theft

Bait cars are usually equipped with GPS tracking systems. BM car programs increase the level of enfo rcement through the use of technology rather than Increased manpower. They also meurmze the danger to police and the public by avoiding pursurts and rammmqs . \'\/hen supported by a broad based media and marketing campaign, these programs can result in long term reducnons in auto crime ecn.... lty

In order to ensure the success of a bait car program. the following practices should be implemented

• Implement an aggressive media and marketing program. This can plant the seed that there are far more bait cars In place than there actually are

An effective program could include television , radio , and newspape r advertrsmq as well as banners , posters, and bus shelter murals , Also consider an internet websi te (i e baitcar.com). whic h shows videos of real bait car thefts and the ensuing arrests, These publicly-viewed videos are embarrassing to the th ieves and can be a deterrent to further thefts

• Change the bait vehicles so the thieves will not recognize bait cars. Use vehicles that are among the most frequently stolen but change the colou r and style often.

• Partner With the auto crime section of the local police force

A bait car program can produce successfu l results, For example, the bait car program In B C is cred ited for reducing auto theft in Greater Vancouver by 10% in 2004 and 11% In 2005 ,3 The program has been expanded to include recreational products such as snowmobiles, A1Vs seadoos. motorcycles , and boats and motors

Auto Theft Preven tion Programs

Citizen 's Crime Watch Volunteer Program

The prem ise of th is program IS to recruit private CItizens as a crime watch volunteers , Once a month two volunteers team up for 6-hour evening street patrols . Equipped with access to CPIC data on donated laptops or palm pilots, portable computers and radios , the teams patrol high auto theft areas and act as addit ional eyes and ears for the police. They input licence plate numbers of parked and moving vehicles If the input matches the plate number of a vehicle listed on a "hol sheet" of stolen autos , the volunteers keep an eye on the suspect auto and alert the pollee about thei r finding This program has been successful in B.C where Citizen's Crime Watch volunteers help 10 recover between 1000 and 1400 stolen vehicles ,

Limited Hours on th e Road Program

A distinc tive decal or other vehicle Identifier that ISplaced In the rear window tells police that tt ne vehicle IS rarely d riven between certain hours such as 1 am and 5 am When pollee spot a vehicle With a deca l on the road between these speci fied hours, they stop the vetucte 10 verify the dnver's hcence and registration

Ttns program is a simple . cost effective proven way to reduc e the fisk of auto theft and an effective deterrent 10would-be thieves

3 Bartcar.com

November 15, 2007 Page 8 of 18

Best Practice Models fo r Combat ing Au to Theft

Veh icle Recovery Technolog y

In jurisdictions where the vehicle recovery rate IS low, the insurance industry can help increase the recovery rate by fundmg the use of vehicle recovery technology by police . These systems allow pohce to track a stolen vehicle through a cellular signature. Once the vehicle's general vicinity has been identified through It's proximity to cellular towers , II can be located by specially equipped police cars The most popular systems are manufactured by La/Jack and Boomerang

These systems result in increased recoveries and occasionally lead police 10commercial crime operations such as Chop shops.

Recovering Auto Th eft Claims Costs

Impleme nt provincial programs that will initiate civil lit igation against car thieves involved in the theft of or possession of stolen vehicles in order to recover all of the associ ated costs including

• vehicle repairs of replacement • loss of use • property damage • refund victim deducubtes • all Invesuqanve expenses • legal costs

The programs would target adult and young offenders convicted of theft of vetucle or possession of stolen property, charged but not yet convicted of theft of vehicle or possession of stolen property, and apprehended but not charged With theft of vehicle or possession of stolen property .

After a judgment is obtained against an auto thief the judgment stays in effect for up to 20 years Those wrth unpaid debts would be disqualified from obtaining a driver's licence, reqistranon. or Insurance,

Manitoba Pubhc Insurance (MPI) implemented a similar program in 2001 which has been successful In generating revenue and has received strong public support The Insurance Corporation of Brmsn Columbia (ICBC) has recently implemented a Similar pilot project called Project No Free Ride designed to enhance existing law enforcement and auto theft programs and act as a powerful deterrent against future auto theft . In addition, ICBC is taking civil action 10recover more than $2 million in claims costs from the "top" convrcteo auto thieves ,

Autom ati c licence Plate Recognition

Automatic licence plate recogn ition (ALPR) is a mass surveillance method that uses optical character recognition on images to read the licence plates on vehicles. As of 2006 systems can scan number plates at around one per second on cars travelling up to 160 km/hr , They can use existing closed-circuit television or road-rule enforcement cameras, or ones specifically designed for the task , They are used by various police forces and as a method of elect ronic toll collection on pay-per-use roads, and momtonnq traffic activity such as red light adherence in an mtersecncn. They are also used at ports, airports. Olympic srtes. bridge crossings, tunnels, and national secunty sites and for crime scene mapping

After the hcence plate has been identified It can then be cross-referenced agamst a police database The database is compnsed of stolen vehicles , uninsured vehicles , vehicles with stolen licence plates , vehicles associated to prohibited or unlicensed drivers and vehicles associate to person of interest.

November 15, 2007 Page 9 0118

Best Practice Models for Combating Au to Theft

Best practice model for use of auto theft devices

Mechanical Imm obilizers

Mechanicallmmoblhzers Include steering wheel locks , shifter locks and brake pedal locks , Although these devices can be good visual deterrents , an electronic immobilizer provides much better protection against auto theft

Vehicle Alarms

Vehicle alarms draw attention to would-be thieves with sirens, beeps and other loud noises Some systems trigger flashing lights too

False alarms have reduced the public's faith in this type of anti-theft device. However, a quality product that is professionally installed or adjusted can offer good protection.

An alarm may deter a break-in , but it can't stop someone from driving off with your vehicle . To do that , you need an alarm system that includes an electronic engine immobilizer.

Electronic Immobi lizers

Among all types of ann-theft devices , electronic engine immobilizers protect you best against vehicle theft . Electronic Immobilizers require a special key or small electronic device to start a vetncie's engine

An electronic immobilizer is a device fitted to a vehicle to prevent it from being stolen Immobilizers work by isolating two separate circuits that the vehicle requires to run (that is, the starter, igOlllOn, fuel or engine management systems) This effect is achieved by inserting a relay into each circuit and controlling the activation of the relays via Intelligent solid state CircUitry

In January 2005. the Department of Transport amended Canada Motor Vehicle Safety Standard (CMVSS) 114. which IS part of the Motor VehICle Safety Regulations (MVSR) , The purpose of the amendment is to require that vehicles be equipped WIth anti-theft immobdeaton devices More specifically , the Department requires that all vehicles havmq a Gross Vehicle Weight Rating (GV'V'JR ) of 4 536 kg or less have an immobilizatton system installed that . at the choce of the manufacturer. meets one of the following standards '

• Underwri ters' l aboratories of Canada CAN/UlC·S338. "Standard For Automobile Theft Deterrent Equipment and Systems: Electronic Immobilization;" or,

• United Nations Economic Commission for Europe (UNECE) Regulation No. 97, "Uniform Provisions Concerning Approval of Vehicle Alarm Systems (VAS) and of Motor Vehicles With Regard to Their Alarm Systems (AS)."

Best Practice Model for Use of Electron ic Immobilizers

Introduce a voluntary electronic vehicle immobilizer program by offering an incentive such as a rebate which provides a discount off the retail price for installation of an enmobihzer. The program could target specmc vehicles , communitres or persons Tjus may Involve partnering With the auto Insurance industry in the member junsdcnon.

A voluntary program is likely to have a high level of public acceptance and take-up as well as being relatively inexpensive and straightforward to implement.

2. Develop secunty ratings for vehicle manufacturers to raise public awareness and encourage industry best practce

3. Develop other public awareness and marketing campa igns 10promote electronic rmmobilizers to achieve high take-up rates.

November 15. 2007 Page 10 of 18

Best Practice Models for Combating Auto Theft

Best practice model for young recid ivist car theft offender programs

Backgrou nd

Australia provides several programs to young offenders with a history of motor vehicle related offences Entry criteria is limited to recidivist motor vehicle offenders aged 151020, Participants are usually referred by the courts or by SOCIal agencies The programs uniquely address two mejor commuruty challenges - youth unemployment and youth crime (partcutany motor vehicle theft)

The ten week programs are offered within the environment of a mechanical workshop, offering young people hands-on traming in auto mecharncs. spray painting, body work, detailing, workshop safety, driver education, literacy, and communication skills The programs also offer vocational support such as work expenence. interviews. job placement, and links to employment and further education. Legal motor vehicle related recreational activities such as go-eart racing are offered along with other positive social and recreational experiences

The programs could be classified as personal development programs as they provide opportunities for participants to assess their recent past and work with a youth worker 10make choices to address their offendmg behaviour and make positive changes In their lives Although most of the courses offered are not directly aimed at confronting offending behaviour. they encourage participants to use their interest in motor vehicles in a legal and positive way.

Over a fIVe year period. one program called "Hand Brake Tum" placed 72% of young particpante mto employment and ecucanonar placements . Independent research has demonstrated that 90% of these young people were still in placements after 12 months. The research also determined that 80% of all participants had not re-offended up 10 12 months after completing the program

In Australia. these programs are funded by the federal government and supported by state governments. the Australian Youth Foundation. law enforcement. and NRMA Insurance who serve as the projects major corporate sponsor. Each project is also supported by regional industries and businesses

Model Cri teria

In order to establish successful programs, the following cntenon is essential :

• Clear. attainable, and measurable objectives

• Highly driven staff who are committed to working with young people

• Managers who are committed to their staff , young people , and to continuous improvement

• Regional or local based advisory committees who guide the project and link it to local needs

• Sponsors and funding bodies

• Support from SOCial eqenoes to assist With housing , transportation . and other support services for perncipente

• Community support

• Strategically locahng the programs In a location that has a entreatmass of automotive trade businesses and the potential capacity to absorb participants into automotive related employment

• Specific eveluanon methodology

November 15. 2007 Page11of18

Best Practice Models for Combating Au to Theft

Best practice model to ensure secure identification of motor vehicles

VIN Securit y

The metal Vehicle Identification Number (VIN) plate affixed to the vehicle chassis with pop rivets is the primary source of vehicle identification

1. Manufacturers are encouraged to mark the VIN on all major components of the vehicle to help identIfy theft recoveries .

2. Encourage motorcycle manufacturers to mark the VIN on the engine as well as the motorcycle frame .

3. Build a field into jur isdictiona l registration computer systems to capture the part number of motorcycle engines.

4. Implement a VIN etching program to provide a visual deterrent.

Secure Identifi cation Labels

Back ground

This section provides educational background for future consideration and/or use,

Sophisticated identification labels with features designed to prevent counterfeiting and recognizable tampering/removal have been developed and are used successfully overseas . These products include specialized footprint labels , coded data formats , self-destruct features , and sub-surface data printing systems , The use of secure identification labels will assist law enforcement agencies in identifying stolen vehicles and components to promote successful prosecutions

Footprint labels are resistant to heat, engine , transmission, and coolant fluids and normal environmental exposures , Special dyes are mixed into the adhesive which react with the painted substrates This leaves a 'footprint' that is visible under ultra-violet light if the label is removed . The labels Will self-destruct if any attempt is made to remove them,

Labels may incorporate coded data such as hidden logos or holograms that require special retro ­reflective viewing conditions for verification .

Sophisticated laser based sub-surface imprinting techniques add counterfeit protection and "life-of­vehicle'durability . Access 10 the data face is impossible without destroying the label.

In order to be successful , secure identification labels must reflect the latest advances in technology, law enforcement agencies must be trained in identifying and verifying vehicles and components that may be stolen, and they must be equipped with the appropriate verification and detection equipment.

Identification of Vehicle Components

To be effective, identification of vehicles components must make the task of re-identifying a vehicle too much trouble and too risky for professional thieves . To do this the identification methods must be overt so that everyone knows it is there, it must be very difficult to tamper with or remove, it must be easy and relatively inexpensive to apply . and it must be easily identifiable by police and registration author ity personnel.

Microdot technology can be used successfully as a theft deterrent. It meets all of the above criteria and thieves will find it almost impossible to defeat.

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Best Pract ice Models for Combating Auto Theft

Microd ot Tech no logy

The application of microdots is one of the most advanced identification system available for protectmg your vehicle from theft. Once applied. a vehicle then has its own "DNA", making II traceable by law enforcement back to the lawful owner and undesirable for a thief to steal

The information coded on the dot is either the original manufacturers VIN or a unique PIN number which is linked to the VIN of the vehicle through national databases only accessible by law enforcement. The finding of any microdot allows police to prove the true ownership of any asset and in doing so, identIfy stolen parts and make verifiable prosecutions.

Microdots are about the size of a grain of sand. each coded with lines of text applied using a sophisticated laser process

The dots are applied to assets using an adhesive specially developed for microdots which contams an ultra-violet trace that fluoresces under UV black lights typically used by law enforcement and forens ic personnel.

Once applied , microdots are resistant to most acids. solvents , road salts, heal. and significant damage would need to be done to an asset to remove them. The dots are read using a simple magnifying reader commonly available from most electronic or hardware stores

Microdots on Vehi cl es

Each vehicle is marked With thousands of uniquely coded microdots which are simply sprayed on the chassis, compliance plates. and high theft engine components Microdots may also be applied to other parts of the vehicle including alloy wheels, DVD's. and stereo equipment.

Window and engine warning decals are also fitted to every marked vehicle to aid in theft deterrence and recovery ,

As it is near impossible to remove the thousands of microdo ts applied to a vehicle . professional thieves run a very high chance of being either caught with stolen items or can be identified later as the distributor of stolen parts through the finding of just one microdot.

Microdots may be applied aftermarket

November 15, 2007 Page 13 or 16

Best Practice Models for Combating Auto Theft

Intensive Marking to Prevent Vehi cle Theft

Intensive Marking is an aftermarket identification process available for the protection of a vehicle against theft and is used in the identification and tracing of its parts following a theft ,

The process consists of applying a unique code by means of a sandblasting and electric engraver to glass, lights. mag wheels , engine parts and other components on a vehicle , In order to add to its deterrent value, distinctive decals should be displayed with a unique symbol well recognized by the police and organized criminal groups involved in vehicle thefts .

The process should be esthetic , visible to the naked eye (Minimum of Y."(6mm) high and 3/16"(5mm» and should not require any specialized equipment to read or decipher. It acts as a pre-inspection on vehicles being insured or registered and deters fraudsters from insuring paper cars , cloned vehicles , previousl y damaged and salvaged vehicles and also uncovers odometer rollbacks.

Applyin g the Intensive Marking

The Intensive Marking identification code should be engraved on automob iles, motorcycles , small and large trucks, motor homes , heavy equipment, boats and recreational vehicles . It is recommended that a minimum of 50 parts be marked on automobiles and 125 parts on large trucks, heavy equipment and boats

A sandblasting technique should be used to apply the identification code on all glass and plastics such as windows, sunroofs and lights. It should also be used to mark body panels on large vehicles and mag wheels on automobiles and trucks.

An electric engraver should be used for parts inside the engine compartment and in difficultlocalions requiring smaller lettering

The code should be apposed 10 the vehicle using a sandblaster method and electric engraver , that is virtually impossible to remove, modify or obliterate therefore making the vehicles marked less attractive to professional thieves and distributor of stolen parts,

A quality control system should be maintained in order to ensure the quality and integnty of all markings,

Unique Identification Code

An Alphanumeric Identification Code should be used. composed of letters and a sequentia l number that cannot be deciphered , created or recreated to match the vehicle on which it is applied , The code should be entered into a database and cross-referenced to the Vehicle Identification Number (VIN) that is available to the police and registration authorities 24f7. All pre-owned marked vehicle VINs should be validated through a recognized Vehicle Identification Number data provider to establish the present or past status of the vehicle ,

The code when viewed by police and other authorities should allow them to quickly determine the locat ion where the vehicle was originally marked, It assists in tracing the origin and true identity of a suspected stolen vehicle thus becoming an indispensable investigational aid,

November 15. 2007 Page 14 01 18

Best Practice Mod els for Combatin~ Au to Theft

Bes t practice model to create high public awareness

The follow ing are some recent effective examples of programs created to create high publ ic awareness that could be considered for all jurisdictions

1. Implement a junsoicncnal limited hours on the road program such as B.C.'s "Combat Auto Theft (CAT) program , In this programs, vehicle owners register their vehicles which them allows law enforcement officers to stop and check these vehicles between the hours of 1:00 am and 5:00 am when a large percentage of veh icles are stolen. Thieves are less likely to steat a vehicle with a CAT sticker for fear of being pulled over by a police officer

2 Create vanous advertising campaqns to educate the public an how to protect their vehicles from auto theft An example ISthe "Layered Approach to Protection": The four layers of protect ion are.

• Cammon sense - remove keys from the igOlllon, lock doors and windows , and park in well-ht areas,

• Warn ing devices - audible alarms , steering whee llbrake pedal locks. whee llt ire locks, theft deterrent decals . identificat ion markers in or an vehicles, Window etching

• Immobilizing devices - smart keys, fuse cut-offs , kill switches, and starter , fuel , or ignition diseblers .

• Tracking devices - devices that use Global Positioning Systems (GPS)

3 Develop advertrsmq campaign directed at the importance of securing vehicle keys Never leave keys inSide a vehicle and know the location of your keys at all limes Vehicles are often stolen from self-serve fuel stations while owners are paying the attendant or when vehicles are left to warm up outside

4. Create an awareness strategy to educate teens about the dangers of auto theft. This could be a powerfu l educatcnat tool for use by teachers , school liaison officers, insurance brokers, and public safety advocates .

For examp le, B C. is producing a raw and edgy auto theft prevention video that will be shown to high school students across the province to inform them about the dangers and traged ies of auto theft with the ultimate goal of saving lives and reducing auto cnme. The auto theft video will provide a graphic deterrent to auto theft and will focus on the stones of offenders and victims with an emphasis on the loves that have been stolen as a result of auto theft The video will be fast paced and designed to hold the attention of teenage viewers

5, Develop partnerships with property owners (malls and parking lots) and business improvement assoctanons. Such things as parking lot stgnage, volunteer bicycle patrols, and advertismq campaq ns would help deter auto thieves.

No\l'OO'Cef 15. 2007 Page 15 of 18

Best Practice Models for Combati ng Auto Theft

Best practice model for veh icle inspection programs

Most jurisd ictions have a passenger vehicle inspection program , either annual, point-of-sale , or upon admittance to the jurisdiction, It is important that private vehicle inspections verify and validate the identity of vehicles presented for inspection, VIN discrepancies, alterations and tamper ing are not bemq detected as evidenced by a number of police investigations and subseque nt seizures of stolen vehicles ,

Continuous improvement of system operation and vehicle inspection standards will improve the detection of cloned stolen vehicles and other types of masking vehicle theft .

• Ensure jurisdictional inspection tacihties sight two matching VIN's

• Provide regular training on the detection of "bad" VIN's or CMVSS labels

• Provide an educational package with visual aids as an ongoing skills development plan

• Have a strong inspection facility audit program which includes regularly scheduled audits

November 15. 2007 Page 16 of 18

Best Pract ice Models for Combating.Auto Theft

Best practice model to safeguard against identity theft

Jurisdictions are encouraged to provide educational material to clients regarding identity theft as this is strongly tied to auto theft.

What Is Ident ity Theft ?

Identrty theft occurs when someone gains access to another person's personal mtormatcn. such as the DL number, SOCial security number, bank or credit card account numbers, and uses them to commit fraud or theft. An impostor can use your identity to open fraudulent credit accounts, secure loans for cars and housmq, or steal money from your bank accounts,

Identity Theft Invol ving Vehi cles

Identity theft can include theft of driver licenses, birth certificates. or banking information to obtain false tdenufrcancn Identity thieves can use any of these documents to secure a new identity and purchase vet ucles and insurance in the name of the identity theft VIctim, Vehicles and Insurance are often purchased and sold USing false identities and false credit cards.

In most of the cases involving vehicles. vehicles are purchased at an auto dealership with a credit card The vehicles are not high in value and therefore the purchase by a credit card does not reee susccicn at the dealership. Depending on the nature of the financial transaction (cash, cheque or credit) , either the Id theft VIctim, motor dealer, or the credrt card company can become a victim of identity theft

Impa cts to Vehi cle Own ers

• Vehicles improperly registered in identity theft victim's names • Insurance claims filed in identity theft victim's names • The victim's policy hrstory can be affected affecting insurance rates • Debt for Insurance poncies taken out rn a false name • Credit rallng affected by debts incorrectly in their name • Couecnon agencies trying to collect debt from a victim of identrty theft • Fraudulent driver licence activity by the thief resultrng in motor vehicle tickets, or uSing a onver

license to as oenutcanon to purchase other services • l oss of the value of a vehicle (motor dealers or credit card companies)

Best Practices to Protect Vehi cle Owners

• Lmk reqrstranon. licensing, and insurance databases with drivers' hcence databases in order to inform all agencies that a driver's licence has been stolen

• Develop and implement a standard identity theft statement to be completed by the victim • Develop and distribute used auto bUyIng guides

Top Ten General Best Practices to Avoid Identi ty Theft

1 Shred all financial documents before throwing them out. 2 Purchase a locking mailbox or route mail to a post office box. 3, Distrust e-mail links - instead, type addresses directly into the address box. 4 Protect your computer with a firewall and anti-virus software 5 Don't disclose social security numbers or other confidentia l information 6 Download software WIth caution - avoid downloads from questionable web sites 7 Create unique passwords , commrt them to memory 8 Don't open e-mail attachments from unknown sources 9 Don't put personal information such as your driver 's licence number on cheques 10 Purchase identity theft protection

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Bes t Pract ice Models for Comb ati ng Auto Theft

References

National Motor Vehicle Theft Reduction Councll - Strategic Plan 2005 (Australia)

National Motor Vehicle Theft Reduction Council- Best Practice Model and Business Plan for a Young Recidivist Car Theft Offender Program - April 2002 (Australia)

Florida Ann-Car Theft Committee (U SA) (from website August 2006)

Stansncs Canada (Canada)

Provincial Investigation Team Newsletters - Various dates - Insurance Corporation of British Columbia (Canada)

Stolen and Wrecked Vehicles Monitoring Program - CCMTA June 1994 (Canada)

The Insurance Bureau of Canada - Report on Auto Theft (Canada) (from website August 2006)

National Motor Vehicle Theft Reduction Conference 2000 - Conference Papers (Australia)

November 15. 2007 Page 18 of 18