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DOJ Lays Out NMVTIS Penalty Procedures



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The U.S. Department of Justice (DOJ) recently published penalty guidelines for the National Motor Vehicle Title Information System (NMVTIS) and promised to start cracking down on violators.

“It was announced at the last NMVTIS advisory board meeting, that the DOJ has started a real enforcement effort,” explained Jay Svendsen of Auto Data Direct, Inc., one of NMVTIS’ third-party data consolidators. “This action has resulted in penalties for a half dozen businesses from $43,000 up to almost $2,800,000. These cases are pending civil penalties, so unfortunately DOJ can’t release details until all the details are finalized in the courts.”

The maximum fine for not reporting to NMVTIS is $1,000 per vehicle. But there is some leeway, depending on the business’ size (gross profits), gravity of violation - i.e. how many times it disregarded reporting - and the company’s demonstrated willingness to comply.

The details of the penalty guidelines are available at www.vehiclehistory.gov, but are broken down like this: size accounts for up to 25 percent of the maximum penalty and is separated into four levels, from gross profits fewer than one million, level one, to more than $10 million, level four. The gravity of the violation accounts for up to 50  percent of the penalty, from less than 100 unreported vehicles to more than 2,500. The demonstrated willingness to comply, accounts for another 25 percent. 

Auto recyclers, insurance carriers, salvage pools and auctions, scrap processors - and anyone else who handles five or more salvage vehicles per year - have been required to report Vehicle Identification Numbers (VINs) to NMVTIS since March 31, 2009.

“The most common complaint we hear from businesses that report to NMVTIS is about enforcement or the ‘lack of it,’ said Svendsen. “Many point out that they have been doing the reporting for years yet some of their local competitors have not even started. People are justifiably upset that they are putting in extra work that takes time away from other business matters and that it is frustrating to know that others are skipping this requirement. 

“Hopefully the following information will make some users feel better about their reporting efforts,” he added.

Svendsen noted that many businesses feel that reporting will put them on the DOJ’s radar and will invite penalties and enforcement actions on their business.

“If anything the opposite is true,” he said. “The way NMVTIS reporting works is that each vehicle record submitted is one link in a chain of reports that shows the vehicle at each stop to the end-of-life cycle.”

That chain begins with who the vehicle was obtained from or who it was sold / transferred to. “If the DOJ sees that a dismantler is receiving scrap from a specific insurance company or salvage pool, and then sees no report from them, it knows who to go after,” he explained.

Svendsen added that with all the major salvage pools and most of the big shredders reporting on a daily basis, the DOJ has millions of records available to locate “non-reporting” parties. The DOJ also confirmed it does follow up with all non-reporters that are turned in by other businesses through e-mailing nmvtis@usdoj.gov. The more information it contains, the better.

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