Expert Commentary

Using Information To Fight Equipment Thieves—Part 3

In his continuing series on heavy equipment theft, David Shillingford considers ways in which information can be used to fight crime.


Equipment Theft Prevention
December 2002

This is the third of four articles that deal with the growing problem of heavy equipment theft, the costs that result for insurers and owners of this equipment, and what can be done by owners and risk managers to reduce the costs associated with equipment theft. Part 1 of this series discussed the size and nature of the problem and how to align theft prevention with business goals. Part 2 described simple physical measures that can be taken to prevent theft.

This article considers ways in which information can be used to fight equipment crime. The final article discusses how new technologies are being employed to combat equipment theft.

It has been said that, "The pen is mightier than the sword," but can information really deter equipment thieves in the same way as a chain-link fence? To understand the answer to this, it is important to first understand why thieves increasingly see equipment as a soft target, and how information availability—or the lack of it—is such a large part of the problem.

Thieves steal equipment because it is valuable and because they think the risk of being caught when moving, storing, or selling equipment is low. Low recovery, arrest, and conviction statistics would bear out the thieves’ confidence. Why are the chances so low, and how do these relate to information availability?

Ownership Data

The first challenge for an officer investigating suspicious equipment is to ascertain ownership. If an officer stops a car in suspicious circumstances, even if the theft has not yet been reported, the true owner of the vehicle can quickly be determined. This cannot be done for heavy equipment, as there is no mandated national registration system for off-road equipment.

Theft Discovery

The problem of locating the true owner of equipment is compounded by the delay from the time of the theft to the discovery of the theft. A car theft will be discovered hours, if not minutes, after the crime. An equipment theft on a Friday night might not be discovered until Monday morning.

Equipment owners with larger fleets, multisite operations, or some rented equipment may not discover the theft for days, weeks or, in some cases, months. This gives the thief a "window" of opportunity when any investigation by law enforcement will not find a theft report. This is a particular problem because suspicious activity—such as moving equipment at a strange time of day or on ill-suited transport—is most likely to occur during this "window."

Loss Reporting

The next problem occurs when the theft is discovered. There are a number of hurdles to a "successful" equipment loss report that do not exist for autos. Without registration or title documents, a theft victim may not have a record of the Product Identification Number (PIN) or serial number, which is the key information needed to recover the equipment. If the owner has a PIN, it may be a shortened version such as that on a warranty card or bill of sale that may not be a unique identifier. As there is no standard format for the numbering of heavy equipment,1 data entry error is common, and there may be confusion whether to file the loss as an ‘article’ or a ‘vehicle’ in national police and insurance computers.

The internationally standardized 17-character auto Vehicle Identification Number (VIN) has an algorithm that checks the validity of the VIN; however, this cannot be developed for nonstandard PINs—indeed it is difficult for the officer or adjuster to even confirm that the equipment ever existed. Even when an accurate PIN is reported, there is still the risk that the owner is reporting the wrong item because, unlike most auto owners, equipment owners may have a number of similar machines. Whatever the reason, an incorrect PIN renders the loss report almost useless.

Difficulty of Investigation

To identify a piece of equipment requires a level of expertise that increases with certain types of equipment and the degree of sophistication of the thief. Even equipment that has not been "disguised" may have the PIN in many different places, some harder to find than others, with many other identification numbers of components and attachments to confuse the issue.

Officers cannot be expected to have this level of expertise, especially given the low priority of this victimless crime. Officers know from experience that equipment investigations are time-consuming and often lead to nothing but frustration. Therefore, they are understandably reluctant to get involved in such investigations. By contrast, the placement of VINs on autos is standard, and the level of training in auto theft investigations is high and well-funded. It should also be noted that physical and, to some degree, legal access to autos is generally easier than for equipment on worksites.

Used-Equipment Market

The lack of due diligence in the used-equipment market is in stark contrast to that for autos. When buying a car, title documents are exchanged, and services such as Carfax® offer full vehicle histories. Until 2002, nothing like this existed in the used-equipment market.

This is a key consideration for a thief in assessing the risk of getting caught. If stolen equipment can be sold with impunity, not only does this reduce the risk of detection but it also allows stolen equipment to be sold at, or close to, market price. So, it can be seen that thieves rely on low physical security and the lack of availability of information for law enforcement and those buying equipment.

The solution to equipment theft must therefore be built around improving physical security and improving the availability of information.

Data Solutions

Data solutions should be designed to provide accurate information on ownership, loss reports, and equipment identification to law enforcement investigating equipment theft 24 hours a day. The solution should also allow those buying used equipment to check the status of equipment for sale.

How can this be done and how can equipment owners be a part of it in a way that supports the bottom line? The solutions break down into two areas: what to do before a theft and what to do if you suffer a theft.

Pre-Theft

The least that an equipment owner should do is to keep an up-to-date inventory that includes full PIN listings so an accurate theft report can be filed if equipment is discovered to be missing. It is too late to do this once the theft has occurred. Even better is to record key component numbers, such as those on the chassis or engine, as thieves often remove or switch PIN plates.

Data as Deterrence

To use this information proactively, equipment details can be registered online with the National Equipment Register [NER]. NER provides law enforcement with a 24-hour-a-day hotline to support equipment investigations whereby NER can identify the owner of registered equipment found in suspicious circumstances, even before it is discovered to be missing.

Registered equipment will display a decal, such as that shown below, warning a potential thief that the item is registered and that the chances of an item’s detection while being moved, stored, or sold are greatly increased.

National Equipment Register Decal

Post-Theft

Ensure that a police report was filed and, if applicable, a report is sent to your insurer. Due to some of the challenges listed above, it may be difficult to ensure that the correct PIN was recorded in the right part of a national police or insurance computer, so an important backup is needed, such as registering the loss with NER. The key component of this loss report is a correct Product Identification Number (PIN).

Without an accurate PIN on the right databases, the equipment is unlikely to ever be recovered. When you record and report your PINs, note the importance of the prefix—the number on your warranty card or bill of sale may not contain the prefix. Note also that every manufacturer has a different PIN format which will have changed over the years and varies from product to product is some cases.

Also report other attachment or component numbers (such as engine or chassis numbers) wherever possible as these can be cross-referenced against the PIN and may be vital in a subsequent investigation, particularly where a thief has removed or switched the PIN plate.

Buying Used Equipment

Due diligence is important at both end of the process. It is not only important to report a loss accurately, but also when you buy used equipment certain checks should be carried out to avoid the liability associated with handling or selling stolen goods. The more equipment buyers do this, the harder it will be for thieves to sell stolen equipment, which will deter theft.

The obvious red flag when looking at equipment is where the PIN plate is missing. If it is, this may be cause for the equipment to be seized in some states. In any case, this should be cause for much closer inspection and for checking the equipment with police or other registry.

Conclusion

Much of the brazen confidence with which equipment thieves continue to operate is based on knowing how little information is available to officers investigating equipment theft. Much of the solution relies on equipment owners carrying out simple and cost-effective measures such as recording inventories correctly and ensuring that this information is quickly passed to the relevant parties if a theft does occur. The question then is: Does the thief want your equipment more than you do?


1A standard format has been agreed for earthmoving equipment but will take many years to implement.


Opinions expressed in Expert Commentary articles are those of the author and are not necessarily held by the author's employer or IRMI. Expert Commentary articles and other IRMI Online content do not purport to provide legal, accounting, or other professional advice or opinion. If such advice is needed, consult with your attorney, accountant, or other qualified adviser.

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