TEXAS INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION ANNUAL CONFERENCE July

TEXAS INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION ANNUAL CONFERENCE July 24, 2017

How to Contact Us Bill Harbeson ENFORCEMENT DIVISION DIRECTOR (512) 465 -4142 bill. harbeson@txdmv. gov David George CHIEF INVESTIGATOR-MOTOR VEHICLES (512) 465 -4147 david. george@txdmv. gov Corrie Thompson MANAGING ATTORNEY (512) 465 -1205 corrie. thompson@txdmv. gov

Agenda o Enforcement Division Update o Most Misunderstood Rules o Hot Topics

ENFORCEMENT DIVISION UPDATE

Tx. DMV Mission To serve, protect and advance the citizens and industries in the state with quality motor vehicle related services.

Tx. DMV Enforcement Division In a fair, consistent and predictable manner, enforce the statutes and rules that govern the motor vehicle, salvage and motor carrier industries, including household goods carriers and oversize/overweight vehicles.

Enforcement Update 82 Employees - 24 Motor Vehicle Industry Investigators Offices: Austin San Antonio Longview El Paso Fort Worth Dickinson Dallas/Mesquite Pharr Houston Lubbock 2017 SIU Appropriations: 5 Investigators 1 Attorney 2 Admin Responsible For: Motor Vehicle Sale and Distribution (17, 674 Dealers /170 Manufacturers) Salvage (8, 714 Salvage Dealers) Motor Carrier Licensing/Insurance (48, 500 Motor Carriers) Household Goods Carriers – Movers (850 Licensed Movers) Oversize/Overweight (50, 000 + Permits Issued Annually) 7

Special Investigations Unit q Title Fraud by Dealers, Title Services and Others q Odometer Fraud q Theft of Sales Tax, Reg. and Other Fees q Drivers Privacy Protection Act (DPPA)Violations q Unlicensed Sale of Motor Vehicles - Curbstoning q Unlicensed Motor Carriers - Chameleon Carriers q Unlicensed Household Goods Movers q Counterfeiting Plates and Tags

Enforcement Caseload - MV 2016 q Cases Opened 5, 945 q Cases Closed 6, 553 q Contested Cases 1, 418 q Civil Penalties Paid $1, 161, 408 q Reimbursement to Consumers $339, 639 9

Enforcement Caseload - Other q Motor Carrier Licensing/Insurance q Household Goods q Oversize/Overweight 5, 293 628 500 q Civil Penalties Paid $2, 260, 258 q Lemon Law Opened q Lemon Law Closed 450 444 10

Enforcement Education q Dealer Training Seminar- Monthly q Salvage Dealer Training Seminar- New in 2017 q Mover Training Seminar* q Law Enforcement - Dealer Law and Temporary Tags and Plates q Law Enforcement - Household Goods/ Hostage Load Training q Law Enforcement - Oversize/Overweight Permitting q NICB/ABTPA Auto Theft - New in 2017 * = Not TCOLE Certified 11

MOST MISUNDERSTOOD RULES 12

Notice of Department Decision q Starts contested case process q States that a decision has been made and recommends a penalty and/or license sanction action q Final Order will be issued if a Request for Hearing is not received within 26 days of the letter q Dealer must file a written Request for Hearing during the 26 day time period q Written request may be by email or letter q Negotiate after filing Request for Hearing 13

Updating Contact Information 10 Days to Notify the Department: § Physical Address § Mailing Address § Telephone Number § Email Address Failure to Update is a Violation Subjects Dealer to Civil Penalty and/or License Sanction Action 14

Records Purchases/Sales § § Maintain Complete Records for 48 months Preceding 13 months at licensed location Must Make Available for Inspection and Copying Must Produce within 15 days of receipt of a request sent by mail or electronic document transfer Record Content § § § Auction Receipt and/or Purchase Record Title Application / Receipt Front and Back of Title Prior to Transfer Buyer's Order / Bill of Sale Retail Installment Agreement Form VTR-136 – Completed/Signed by Buyers Guide Odometer Statement Work-Up Sheets Any Waiver or Other Agreement between Seller and Purchaser Copy of Payment Instrument or Receipt for Cash Received Any Other Documents Related to the Transaction 15

Premises Requirements Established/Permanent Place of Business q Sufficient Office Structure q q q Connecting Walls Comply with Zoning No Residence, Hotel, Motel Able to Receive Mail Desk, Two Chairs, Internet, Phone No More Than Four Dealers q Business Hours q q q Minimum Four Days / Week Four Consecutive Hours / Day Sign Posted at Main Entrance Sign Accessible to Public Present During Posted Hours ‘Be Back’ Sign if Away q Proper Signage q Phone Answered q Sufficient Display Space q License Displayed q Permanently Mounted q Letters 6 Inches or Larger q Showing Business Name q q q At Retail Address or Contiguous Least Five Vehicles Reserved for Dealership Barrier Required if Share May Be Inside q Employee q Answering Service q Answering Machine 16

Curbstoning Transportation Code § 503. 021 A person may not engage in business as a dealer, directly or indirectly, including by consignment, without a dealer general distinguishing number in one of the categories described by Section 503. 029(a)(6) for each location from which the person conducts business as a dealer. ELEMENTS: q Engaged in business as a dealer q At a location other than location licensed by Tx. DMV 17

Curbstoning Occupations Code § 2301. 362 (a) Except as provided by Subsections (b) and (c) and Sections 2301. 358(c) and (d), a dealer may only sell or offer to sell a motor vehicle from an established and permanent place of business: (1) that is approved by the division; and (2) for which a general distinguishing number has been issued. (b) A dealer may sell or offer to sell a motor vehicle online through an advertisement on the Internet to a buyer who never personally appears at the dealer's established and permanent place of business. (c) A dealer may sell, offer to sell, including by consignment, or exchange at a public auction an antique motor vehicle that is at least 25 years of age or a special interest vehicle that is at least 12 years of age or that has been the subject of a retail sale. 18

Temporary Tags- All Tags q Tags must be in 2 mil (minimum) sealable poly bags (if not water resistant) q Cardboard tags or cardboard backing not required q Must be secure so not to flap in the wind q Mount only in license plate holder area – Not in rear window 19

Use of Dealer Tags Do not need current inspection, but CANNOT: q Display signs on vehicle q Use for personal or other business use q Use on vehicle carrying a load Can Be Used: q For parades q By charity q For transporting vehicles from dealer to dealer, auction, etc. q On a loaner given to customer whose car is being repaired by dealer (vehicle specific- because customer is not agent) 20

Buyers Tags q Inspection must be Current q Good for 60 Calendar Days q Required to apply for title within 20 county working days q ONE issued per sale 21

Temp Tag Fee $5 q Charged q Official only for Buyer’s Tag Fee q Collected for every retail sale (even if plates are purchased immediately) q Paid to Tax Assessor-Collector at titling q Charged for out-of-state or export sales – Currently pay with inspection fee at end of month (Watch for change in this area) 22

Internet Down Tags are Buyers Tags expire in 12 months q Allocation is determined by calculation of monthly sales q Replace tags as they are used or expire q Required to report lost, stolen, or destroyed q Requires a log until information is logged into state database q Must be kept secure 23

Internet Down Tags IMPORTANT !! MUST ENTER SALE INFORMATION ON THE NEXT BUSINESS DAY YOU HAVE ACCESS-YOU CANNOT REPLACE UNTIL YOU DO 24

Advertising WRITE YOUR OWN DEAL NAME YOUR OWN PRICE NAME YOUR OWN MONTHLY PAYMENTS EVERYBODY FINANCED NO CREDIT REJECTED WE FINANCE ANYONE Terms or statements with similar meanings are violations

Advertising Used Cars Cannot advertise a savings claim or discount on a used car Can offer savings or discounts only on NEW vehicles

HOT TOPICS 27

q Apply, renew, amend online q 24 hour access q Internet based q Faster Service q Launched Spring, 2017 28

e. TAG Updates e. TAG/web. DEALER Login Security Update (7/24/17) q Enhanced Security q Self-Service “Forgot Username/Password” Reset e. TAG Integration with web. DEALER (Late 2017/Early 2018) q All users will access e. TAG through web. DEALER q Enhanced security features integrated into the tags q Improved buyer’s tag processing for out of state purchasers 29

On-line Education Smart Buyer and Smart Dealer Smart Buyer- Odometer q Smart Buyer- Buying a Used Car q Smart Buyer- Buying a New Car q Smart Buyer- Household Goods sales q Smart Buyer- Flood Damaged Vehicles q Smart Buyer- Buying an RV q Smart Buyer- Vehicle Repairs q COMING q Smart Dealer- Advertising q Smart Buyer- Buying a vehicle on the Internet q Smart dealer- Temporary Tag Use 30

July 19, 2017 Texas Slams the Brakes on a Major Odometer Fraud Operation Tx. DMV Urges Consumers to Protect Themselves against Odometer Rollbacks AUSTIN – A man suspected of rolling back the odometers on hundreds of vehicles to defraud innocent Texas consumers was arrested following a three-year investigation by the Texas Department of Motor Vehicles (Tx. DMV), the Texas Department of Public Safety (DPS), the Fort Worth Police Department, the Grand Prairie Police Department, the Tarrant County Regional Auto Crimes Task Force and the Tarrant County District Attorney’s Office. DPS took the suspect into custody in Grand Prairie on July 6, 2017, on a charge of tampering with an odometer; additional charges are pending. Odometer fraud is the disconnection, re-setting or “rolling back” of a vehicle’s odometer with the intent to defraud. “The Texas Department of Motor Vehicles does not tolerate anyone ripping off Texas auto buyers, ” said Tx. DMV Executive Director Whitney Brewster. “Mileage is a key factor that consumers use when deciding whether to buy a used vehicle. Tampering with an odometer to deceive a buyer is a serious crime that puts innocent Texans’ safety and finances at risk. ” If the odometer has been rolled back, you may end up paying hundreds or thousands of dollars more for the vehicle than what it is worth. And what you presume is a low-mileage and reasonably safe vehicle may have serious safety issues because of the hidden extra mileage. Tx. DMV will contact victims whose vehicles may have had their odometers rolled back as part of this alleged crime ring, so their title records can be updated. “Don’t let this happen to you, ” said Brewster. “The best way to protect yourself from being a victim of odometer fraud is to do a little extra research before you buy. ” 31

Odometer Fraud Project q Vehicles Sold by dealers from Sep 2014 to April 2016 q Dallas and Tarrant Counties q Results Reviewed Evidence of Roll-back 184 Dealers 4679 2127 (45%) 32

Odometer Fraud Project q Criminal cases q Owners being notified and titles branded q First administrative investigations opened q Pulling data for remainder of the state q Administrative actions will occur in cases where evidence shows dealer’s involvement in tampering q Possible civil actions q Total estimated number of affected vehicles exceeds 10, 000 33

THANK YOU BEST OF LUCK WITH YOUR BUSINESS 34