16 CFR Part 455 Used Motor Vehicle Trade Regulation Rule; Project No. P087604 #563688-00109

Submission Number:
Howard Nusbaum
National Salvage Vehicle Reporting Program
Initiative Name:
16 CFR Part 455 Used Motor Vehicle Trade Regulation Rule; Project No. P087604
March 6, 2013 Federal Trade Commission Office of the Secretary Room H-113 (Annex T) 600 Pennsylvania Avenue, NW Washington, DC 20580 Re: Regulatory Review of the Used Motor Vehicle Trade Regulation Rule, Project No. P087604 Dear Secretary Clark: The National Salvage Vehicle Reporting Program (NSVRP), a leading not-for-profit law enforcement support organization dedicated to reducing auto theft, title fraud and abuse, appreciates the opportunity to comment on the Notice of Proposed Rulemaking cited above and thanks the FTC for extending the comment deadline. NSVRP works closely with the U.S. Department of Justice (DOJ), the FBI, U.S. Customs and Border Protection and other parties to help further our mutual objectives. In addition, NSVRP is recognized by the Department of Justice as an independent third party standards body for the National Motor Vehicle Title Information System (NMVTIS), which was created as a result of the Anti-Car Theft Acts of 1992 and 1996. NSVRP’s board is comprised of representatives of local and national law enforcement organizations. In fulfilling our mission of reducing auto theft, title fraud and abuse, NSVRP routinely monitors the sale of used and salvage vehicles, tracking vehicles that are erroneously and sometimes illegally offered for sale with unbranded or ‘clean’ titles, vehicles whose titles are ‘skipped’ when sellers avoid reporting requirements illegally or through state and federal loopholes and vehicles whose titles are ‘washed’ using interstate transfers. In many cases, NSVRP is able to track these potentially unsafe and fraudulently or improperly branded cars from insurers and other parties through the salvage auctions and middlemen as they ultimately pass into the hands of unsuspecting consumers. For all of these reasons, we believe NSVRP is uniquely situated to provide new evidence that has not been considered in previous Used Car Rule reviews. As we will illustrate, segments of the vehicle disposal chain can take advantage of various limitations in federal regulations and inconsistencies in branding and titling that exist between states to offer total loss vehicles with clean titles for sale at auto salvage auctions. When unethical resellers buy these vehicles and then offer them for resale to the public as clean-title, prime used cars they place unsuspecting consumers’ finances, health and safety at risk. NSVRP strongly urges the FTC to consider strengthening the Used Car Rule to mitigate this risk by: • Requiring sellers to disclose known prior history information about the cars they sell; • Requiring sellers to check each vehicle’s history with a history report that incorporates NMVTIS data and include a warning sticker on the vehicle if the NMVTIS vehicle history data indicates that: o the vehicle is or has been reported as a total loss by an insurance company; o the vehicle has been reported as acquired by a NMVTIS junk/salvage reporting entity; or o the certificate of title contains a brand. • Requiring inclusion in the final sale paperwork, to be signed and dated by the seller and the buyer, a notation of whether a warning sticker was or was not included and the effective date on which the NMVTIS data was accessed. In the following pages, NSVRP will provide two examples from the thousands we have uncovered. While the requested 60-day or longer comment submission extension would have enabled NSVRP to complete a greater portion of our research, we still have been able to provide a substantial and thorough analysis and recommendations in response the FTC request for comments. We have thousands of pages of documentation on roughly 100,000 flood loss vehicles backing up this analysis. The complete text of our comments is attached. We believe they provide a compelling justification for the FTC to reconsider its position and we urge the FTC to strongly consider the NSVRP proposal in its place. Respectfully submitted on behalf of the board of NSVRP, Howard Nusbaum Administrator, NSVRP