This fear is one of the primary reasons I remove the last three digits of my VINs in the Marti Reports section.
While title companies do require a reasonable proof of ownership (generally your bill of sale from the previous owner + all known documents prior + a photo of the actual VIN on the car) before they perform a storage lien on any car, it's not secure enough. Mind you, these documents primarily protect the title agency from doing business with and for thieves; these checks are not always a legal requirement of their state, nor is it necessarily required for them to perform the storage lien. The absence of these checks is one of the ways they are able to perform these liens to begin with. Good for the good guy, but also opportune for the bad.
I actually brought this up with Bo from ISO Mustangs as a security concern in regards to the Diamonds Are Forever Mach 1 research. If I am not mistaken, the museum in charge of the Joseph Brancella car is not aware of any original documentation to it - if anything, all they have is import/export documentation from when it went to the Keswick collection and when it returned to the States. Yet, through one of Brancella's old contacts from prior to Keswick, we have scanned copies of Brancella's registration. As important as these documents may be to the history of the car, I mentioned that it may be too risky to publish some of them as public information online - citing the very possibility that became a nightmare of a reality for Mr. Monaco and his Firebird. What's more, clear photos of the VIN and door data tag of the Brancella car are already available online, along with the car's entire history.
Put simply, any dishonest jerk with a faked bill of sale could conceivably take ownership of said car through a title company using just these documents to prove that the vehicle is somehow in their posession; never mind the original registration slip. Thankfully, enough is known about the Brancella car online that its linage is well documented - any faked documents could be whistleblown quite quickly.
This said, having had to acquire a title for my parts car through a title service - thanks to NY's destruction of records (and thus making a new NY title an in-person affair with an NY resident at the NY DMV - not doable from 2,000 miles away for a Florida resident) - I've seen the process in action, done legally. I was shocked at how little proof (or cash) was required to satisfy the title agency that nobody else had claim to the car - in fact, the owner of the agency was equally surprised at the documentation up the wazoo that I presented him, showing the car's trail of ownership right down to the original owner. Personally, I wanted to show that my documentation was iron-clad - and to make sure that his records of our transaction would reflect that.
Word to the wise: If you ever have to get a lost title for an old car this way, be damn sure that you have an excellent paper trail, and you save it. Why? The "Firebird scam" can be done in reverse: Given a valuable enough car, a ballsy opportunist thief may try to illegally acquire a car using a fake version of the Firebird owner's theft story and matching fake documents to claim that your car, which you legally own, is theirs. Essentially the same theft, but in reverse, using the legal system to do the thief's dirty work - similar to the legitimate cases of long-lost stolen cars rediscovered before export out of the US. All any thief has to know is that your car was once issued a brand-new title through a storage lien and know your VIN (or even worse, have access to a copy of one of the car's original paper titles or registrations). Forged paperwork is all that the crook needs to make a fake claim against it.
It sounds like a big risk for a thief, but after seeing what some scum have done to screw over the very lucrative Mopar community, it is quite obvious that there are people in the vintage vehicle business who would not be afraid of a blatantly direct ripoff through the legal system, given the chance of getting their hands on a half-a-million dollar car.
While I've never heard of the "reverse" scam happening, the Firebird story proves my fears about the security flaws of storage lien titles.
Remember: Sometimes you have to second-guess the security flaws of a system just to make sure YOU are safe. Just because a cockamamie scam through some semi-obvious loophole hasn't happened yet doesn't mean you can be ignorant of those possible flaws. That type of attitude may get you caught in the middle of a first-of-its-kind scam someday, whether with empty pockets or an empty garage - or worse yet, the thief may get YOU in jail, not the other way around.
If there's a loophole or security flaw in any process, an opportunistic person of questionable ethics WILL exploit it. It's not a question of "if," it's a question of "when." Protect yourself.
-Kurt