Call Kurtis Investigates: The 'Huge Trend' That Could Cost You Your Car

SACRAMENTO (CBS13) -- It's a growing problem at auto shops that could cost drivers their cars -- and is already possibly affecting hundreds of unknowing car owners in California, a Call Kurtis investigation has learned.

It's called car lien fraud -- essentially using illegitimate car lien paperwork to legally take your car through a process known as a mechanics' lien.

Call Kurtis started digging into the issue in May -- but soon uncovered another problem:

Despite admitting it's a "huge trend," the California Department of Motor Vehicles doesn't want potential victims to know about it.

Assemblywoman Beth Gaines (R-Roseville) called it irresponsible.

"The fact that they will turn their back on consumers is very disturbing," she said.

Car lien fraud begins when a driver takes his or her car in for a repair.

Some shops and dealerships claim they put a lien on the vehicle when no lien was filed at all. But if the driver doesn't pay, the company can sell your car for their own profit.

Call Kurtis confirmed multiple state agencies are looking into this, so why doesn't the DMV want to warn you about it?

"I almost lost my car," said Daniel James, whose 1986 Ford Mustang was sold this way, he said to CBS13.

About three years after he brought it to Sacramento's MK Auto to get a new engine, he said they sold his car without notice.

"I got a hot fever over my face and I go, 'Oh my God,'" he said.

James said every few months MK Auto told him it was still searching for an engine, but in March he said the company told him it sold the car, but couldn't explain why, he said.

"He told me, 'Hey, the car's gone, you're not gonna get it back. It's gone,'" he said.

James said the business never gave him proof of any lien as required by law, and when he checked with the DMV he learned why, he said.

"The lien doesn't even exist," he said.

Call Kurtis has learned from several sources car lien fraud is a growing problem in California. Auto shops or dealers tell you a lien has been placed against your vehicle when no lien was ever filed.

And the auto shop or dealership can end up selling your car.

Consumer advocate Rosemary Shahan calls the practice concerning.

"It sounds to me like car thievery," she said.

The Department of Motor Vehicles admitted the risk to consumers, but the agency didn't want to talk about how consumers could protect themselves -- because it might tip off shady auto shops.

But Gaines told Call Kurtis, by not warning the public, DMV is shielding the wrong people.

"They're actually protecting the bad guys and allowing consumers to be ripped off," she said.

"They need to prosecute these people," James said.

After James complained to DMV investigators about his situation, MK Auto somehow bought back his car and returned it to him. He said his Mustang has the same engine as when he dropped it off three years ago.

Call Kurtis stopped by MK Auto and called the owner, who refused to answer our questions but insisted the lien they put on the car was real.

James is just glad he got his car back -- and hopes to educate other consumers so it can't happen to them.

"You're thinking your car's getting repaired," James said, "your car's getting sold."

Call Kurtis could not find any proof MK Auto placed a lien against James' car.

All the DMV would tell us is that consumers should contact them if they think they've been victimized.