Dealer Details Volume 23, No. 4
Newsletter of the DMV Business Regulation Section
Inside Dealer Handbook updated in November Online chart is useful tool Fee limits now in law Page 2 Dealer Sanctions Page 3 Scam can lead to loss and criminal charges Make sure vehicle is still titled in Oregon New law affects auctions Page 4
DMV Business Regulation Section Oregon Department of Transportation (503) 945-5052 Section Manager Judith Ingram Moore, (503) 945-5283 Investigation Team Chief of Investigations Larry Purdy, (503) 945-5287 Investigators Barbara Caine, Cynthia Comstock, Denzel Gifford, David Jurgenson, Dan Liu Robb McCracken, Rick Parsons (retiring Dec. 31 – congratulations!) and Kelly Garcia Support: Esther Reynoso Business License Unit Chuck Hoffman Betty Fox, Susan Kanode, Karen White Dealer Details Editor David House
www.OregonDMV.com Form 735-7022 (11-2015)
Fall 2015
ODAC updated on DMV’s transformation in future The Oregon Dealer Advisory Committee held its fourth-quarter meeting Oct. 22. The third-quarter (July 2015) meeting was canceled. In the Spring 2015 issue of Dealer Details, I mentioned how DMV is in the planning process to update its core computer systems. DMV asked the 2015 Legislature for funding for the initial stages, and DMV received funding for its Service Transformation Program (STP). STP will upgrade and replace obsolete systems and other technical infrastructure, and will significantly change DMV’s business processes. The DMV Business Case indicates the program will advance: Service Excellence: Expand services, improve performance, adapt nimbly to changes, and comply with federal and state requirements. Efficiency: Improve business processes to enhance accuracy, responsiveness, convenience, and quality, while maximizing available resources. Accountability: Invite and use perspectives of customers and business partners, apply strong project management, report on performance including time, cost, and quality. Modernization: Upgrade outdated methods and technology through an incremental approach to create flexible business systems that can respond to changing customer, stakeholder, and employee needs. Execution of STP will involve a
phased approach over 9-10 years. The 2015 Legislature provided DMV funding to accomplish the first phase deliverables which include: • Complete readiness planning. • Procure a single-solution vendor. • Launch DMV2U, an online transaction center. ODAC voted to approve “@ Your Pace Online” to be a continuing education provider for dealers, and also to provide pre-certification classes for prospective dealers. There are now four approved providers (OIADA, OVDA, 5th Gear Enterprises LLC, and @ Your Pace Online). Gerry Preston with Oregon Department of Environmental Quality (DEQ) Vehicle Inspection Program presented information about the program. Gerry explained there are a variety of testing options currently available: in person, at the self-service kiosks where available, and over the Internet. DEQ also discussed with ODAC issues concerning odometer readings. DEQ rounds to the nearest 1,000. For example, “13,486” miles would be entered by DEQ as “13,000.” This is an issue for many dealers and car owners. DEQ is working on changing how they enter a car’s mileage that has been inspected, and DEQ expects to have something different in place in Spring 2016. – Dan Nicholson ODAC Chair
Page 2
Handbook gets update in Nov. The November 2015 revision of the Title and Registration Handbook is available to view, print, or copy at DMV’s Web site www.oregondmv. com. This revision updates the August 2015 Handbook. The Handbook is normally updated quarterly. The next revision is scheduled for January 2015. You may buy a printed copy from one of these organizations: • Oregon Independent Auto Dealers Association (OIADA), 1-800-447-0302; info@OIADA. com; or www.oiada.com • Oregon Vehicle Dealers Association (OVDA), 1-877-5412277;
[email protected]; or www.ordealers.com Changes in the November 2015 Handbook revision are as follows: Cover Page – The cover page reflects the latest revision date of 11-15. Chapter B, Application for Title and Registration, Form 226 – The Application for Title and Registration, Form 226 has been replaced with the latest revision dated 7-15. On line 3 the motor power option for “FLEX-FUEL” has been added. On line 21 the text has changed from “HOME PHONE#” and “MESSAGE PHONE#” to “TELEPHONE#.” Chapter I, Security Interest Perfection – The Transitional Ownership Document (TOD) chart has been updated to account for the closure of DMV offices on Friday, November 27, 2015 (day after Thanksgiving holiday). – Dave Adams Vehicle Policy
Dealer Details
Fall 2015
Chart offers useful tool A useful tool for dealers to use in calculating expiration dates for 90day DMV Temporary Registration Permits and 10- and 21-day Trip Permits can be found online at www.oregondmv.com. At the DMV website, locate the dealers section on the right side of the page and click “Dealers” in the gray section. Next, under “Dealers,” click “Title & Registration Handbook.” Click the “Handbook Index” and then “Chapter S: Permit Charts.” You will find two expiration date charts – one for any year and one for leap year. Print these expiration date charts and use as directed. DMV needs the following from designated permit agents: • Use the Chapter S Permit Charts to determine the proper expiration date to be placed on DMV 90-day TRPs, and 10- and 21-day trip permits. Don’t be tempted to use another chart such as a Transitional Ownership Document Chart (TOD)
to calculate expiration dates on temporary and trip permits. A TOD Chart is used for calculations for securing a proper TOD application and is not designated for date calculations on temporary registration or trip permits. • Designated Dealers must complete all permits with the required information and follow all applicable temporary and trip permit requirements. Don’t forget the declaration of insurance requirements (ORS 806.080 & 806.060), and signed certification by the permit applicant on the trip permit. Best business practices dictate the use of your new vehicle buyer’s current and valid insurance information. Make a copy of the current insurance card indicating the valid coverage of your new buyer. Check with their insurance agent to determine coverage on the vehicle you sold them. David Jurgenson DMV Business Regulation
Fee limits now in law, not rule House Bill 2282 repeals DMV’s authority to set by administrative rule the fee limitation vehicle dealers may charge vehicle purchasers for preparing and submitting documents to DMV. The fee limitation is now set in statute. The new statutory fee limitation increases the amount dealers may charge from $100 to $150 if the dealer uses an integrator. The integrator is entitled to $25 of the fee charged to the customer.
For dealers who do not use an integrator, the fee limitation is increased from $75 to $115. Additionally, HB 2282 permits customers to negotiate the document processing fees with the dealer. Dealers are not permitted to collect a document-processing fee if the dealer is not preparing the paperwork for the customer. HB 2282 will take effect Jan. 1, 2016. – Kellie Walker Vehicle Programs
Berg Car Company Inc MKW Auto Sales LLC Thomas Sales & Service Inc dba Subaru of Bend Michael Alldritt
Making false statement of material fact on dealer application Dismantler’s failure to notify DMV of address change within 30 days Failed to maintain records of acquired motor vehicles and major component parts Failure to satisfy interest in a vehicle within 15 days Failure to submit application/documents necessary to transfer title within 90 days Failure to submit Dealer Notice of Vehicle Purchased within 7 days Failure to submit application/documents necessary to transfer title within 90 days Failure to submit application/documents necessary to transfer title within 90 days Failure to submit application/documents necessary to transfer title within 90 days Acting as a vehicle dismantler without a current dismantler certificate
Portland Portland
Oregon City
1
2 2 2 1 3 1 1 1
1
1
1
1 1 2 2 2 1 2 2 1
1 2 6 1 1 2 5 2 2 1 1 1
1
3 3 3 1 1
Offense
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1 1 2 2 1 1 1 1
1
1
1
1 1 3 2 1 1 1 2 1
2 3 17 19 1 2 1 4 5 1 1 1
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1 1 1 1 1
$15,000
$250 $250 $2,000 $2,000 $300 $1,000 $1,000 $1,000
$500
$1,000
$500
$1,000 $1,000 $3,000 $500 $1,000 $100 $50 $500 $1,000
$2,000 $750 $17,000 $4,750 $1,000 $2,000 $1,000 $1,000 $5,000 $250 $500 $1,000
$500
$1,000 $500 $500 $500 $500
Count Amount
Dealer Details
Note: Fines and sanctions for dealers and unlicensed dealers may not reflect settlements.
Tualatin LaPine Bend
Portland
Failure to satisfy interest of the selling dealer within 15 days
Portland Salem
Columbia Auto Market LLC George Ephrem dba You and Me Auto Sales Jesse Ephrem dba Good Fellows Auto Sales Cascade Remarketing Services Inc
Bend
Portland Happy Valley
T and R Auto Wholesale LLC Fidelity Fleet and Finance LLC
Making false statement of material fact on dealer application
Portland
WFJ Auto Wholesale LLC
Tualatin
Albany
Milwaukie
Failure to submit application/fees to DMV for purchaser within 90 days Failure to submit fees and application to DMV within 30 days Failure to submit fees and application to DMV within 30 days Failure to submit all taxes or fees due this state or another jurisdiction Failure to provide clear title by failing to satisfy interest within 30 days Failure to furnish title within 90 days Failure to provide clear title by failing to satisfy interest within 15 days Failure to submit fees and application to DMV within 30 days Failure to provide clear title by failing to satisfy interest within 15 days Completing DMV VIN Inspection form without physically inspecting vehicle Failure to obtain supplemental dealer certificate for locations vehicles sold/displayed Failure to submit application/documents/fees to transfer title within 90 days
Portland
Luciano Carvalho dba Ameca Auto Inns J and G Motorz LLC (Cancellation) Danielle Thompson dba A M G Motorsports A Better Car Dealership LLC (6 MTH Suspension) Lil Bit of Auto Recycling LLC (3 YR Suspension) Columbia Motors Inc (1 YR Probation)
Failure to obtain corrected dealer certificate prior to moving place of business
Salem
QGT Auto Sales LLC (Permanent Revocation) DU Truck Service Inc dba Truck Source Inc Lima Family Auto Sales LLC
Issuing DMV a dishonored check Failure to submit fees/documents to DMV necessary to transfer title within 90 days Failure to furnish title within 90 days Failure to furnish ownership documents to purchaser within 25 days Failure to obtain supplemental dealer certificate for locations vehicles sold/displayed Allows the unlawful use of an out-of-state registration plate Failure to immediately remove foreign registration plates from vehicles in inventory Failure to submit written notice to DMV of sale/transfer of vehicle within 10 days Failure to satisfy security interests within 15 days
Failure to display dismantler certificate in publicly accessible manner Failure to provide means of public contact during normal business hours Failure to display permanently affixed exterior sign clearly visible from highway Failure to allow DMV inspection Making false statement of material fact on dealer application
Bend
Salem
Violations Found
City
Dealer Civil Penalties Michael Lungoci dba Riverbend Recycling (3 YR Suspension)
Fall 2015 Page 3
Dealer Sanctions
Page 4
Dealer Details
Scam can lead to financial loss and criminal charges An Indiana vehicle dealer and several others recently were convicted in federal court on loan fraud charges involving what is described as “phantom vehicle loans.” Several credit unions were the victims, losing nearly $1.6 million. In this scam, a “loan broker” and a vehicle dealer prepare documents, giving the documents the appearance that a consumer is purchasing a luxury vehicle. The consumer applies for a vehicle loan using these documents. Once the loan is funded, the sale is rescinded by the consumer before taking delivery of the vehicle. At the direction of the loan broker, the dealer refunds the money received from the lender directly back to the consumer, minus 20 percent to 30 percent, which is split between the loan broker and the dealer. The lender never receives a title from the dealer, and when the loan defaults (which most of these do) the lender gets a big surprise: There is no collateral (vehicle) to repossess. Fake Social Security numbers
and information are typically used to obtain these loans. If you, as a dealer, are approached by a loan broker representing a prospective buyer, be wary! These loan brokers attract consumers who cannot get an unsecured loan due to bad credit. A collateralized vehicle loan is often easier to obtain and carries a lower interest rate. Tr i c k i n g a n y f i n a n c i a l institution into approving a loan is a form of bank fraud and/or theft, serious crimes under state and federal laws. Also, if you are involved in a vehicle sale that was financed by a lender, and the deal has unwound, it would be prudent to contact the lender for instructions on returning the funds. Often, when you receive the funds by check or electronic transfer from a lender, you guarantee to provide title or perfect their interest in the vehicle. If the deal unwinds, and the lender is not made aware, you may find yourself in the middle of a big problem. – Rick Parsons DMV Business Regulation
New law affects vehicle auctions Effective Jan. 1, 2016, House Bill 2886 clarifies who can participate in vehicle auctions specified as “dealer only” auctions. The law replaces the term “authorized representative” with
“employee,” mandating that only a certified dealer or their employee may participate in “dealer only” auctions, and in vehicle displays (auto shows). – Deborah Mercer Vehicle Programs
Fall 2015
Make sure vehicle is still titled in Oregon An Oregon dealer recently purchased a vehicle at an auction using their dealer flooring. The purchase order from the auction indicated that the vehicle was titled in Oregon. The Oregon registration plates were on the vehicle and displayed valid registration stickers. The Oregon title was mailed by the auction directly to the flooring company that provided the inventory financing. The dealer later paid the flooring company and received the title but did not notice that the Oregon title had been converted to an Indiana title in the name of the flooring company. The dealer sold the vehicle but only collected the title transfer fee, assuming the Oregon registration still was valid. Once Oregon receives notice that a vehicle has been retitled in another state, the Oregon title and registration are invalidated. In this case, the buyer was driving a vehicle with invalid registration. Fortunately, the buyer was not stopped and cited by law enforcement. The buyer subsequently had to take the vehicle to DMV for a VIN inspection and apply for registration. Dealers using inventory financing should be aware of this and check titles they receive from flooring companies. If the title received has been converted to another state’s title and the vehicle has not been sold, the Oregon registration plates should be removed and destroyed because they are no longer valid. When the vehicle is sold, the dealer will need to collect title, registration, plate, and VIN inspection fees. A VIN inspection must be performed and submitted along with the application since the vehicle is now new to Oregon. – Rick Parsons DMV Business Regulation
