It does feel somewhat unfair, but it's long-settled law on stolen goods: if you buy a car and it turns out to be stolen, or a house with an improper title, you don't get to keep it. In both cases the buyer is supposed to check and beware of "too good to be true" offers.
Note that they get to keep the principal, so they're not even out the money they might be if they bought a stolen car.
Note that they get to keep the principal, so they're not even out the money they might be if they bought a stolen car.