"Liens are recorded in state Uniform Commercial Code databases across the country, with the public filings intended to standardize interstate transactions and alert creditors about business debts and financial obligations. The Times' investigation found that state databases of UCC liens, which were designed to be straightforward and quick to file, are inherently vulnerable to abuse. A single false filing can claim an individual or business owes debts worth hundreds of millions or even trillions of dollars."
"The bill by Assemblymember Diane Papan (D-San Mateo) comes after a Times investigation in July found lien claims filed with the secretary of state's office are used by antigovernment agitators, including so-called "sovereign citizens, " for conspiracy-laced demands and vendettas. The U.S. Justice Department and the nonpartisan Congressional Research Service have called fake liens a form of "paper terrorism.""
A California proposal targets fake liens filed against politicians, court employees and businesses that force victims to spend thousands to clear their names and repair credit. Fake filings cost about $5 to submit but impose large legal and credit repair costs on victims. State Uniform Commercial Code databases, designed for quick filings, are vulnerable to abuse; false liens can claim hundreds of millions or even trillions in debt or be repeatedly filed to create an appearance of ongoing indebtedness. Federal agencies characterize fake liens as "paper terrorism." The proposal would raise penalties and make fraudulent filers pay triple court fees.
Read at Los Angeles Times
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