Consumer groups file lawsuit to fight title-washing with nationwide database

Three consumer advocacy groups seeking to speed along creation of a national register designed to quash title-washing have joined forces to file a lawsuit against the U.S. Department of Justice. Such a system is still not in place more than 15 years after Congress required the federal government to implement a nationwide database allowing car buyers to determine whether a vehicle has been stolen or rebuilt after a wreck, according to Public Citizen, Consumers for Auto Reliability and Safety (CARS) and Consumer Action.

The organizations contend that the database would help consumers avoid purchasing a potentially dangerous used car by letting them instantly check the validity of a vehicle’s title and mileage and learn whether it had been stolen or was a junk or salvage vehicle. (A salvage vehicle is defined as one that was totaled in a collision, fire, flood or other event to the extent that its value, plus the cost of repairing it for legal operation, is more than its fair market value immediately before the event that caused the damage.)

The lawsuit, launched in February, is pending before the U.S. District Court for the Northern District of California.

And while the Society of Collision Repair Specialists (SCRS) has not yet made a decision on whether to join with the suit or perhaps file a friend-of-the-court brief in favor of the plaintiffs, the organization supports a unified effort to stop title-washing. “If a car is totaled-out, it shouldn’t be re-titled and sold to someone else,” says Dan Risley, SCRS’ executive director.

Not only do consumers face safety risks when unknowingly buying these vehicles, but repairers also may be exposed to dangerous hazards – especially when a toxically contaminated “flood car” is being disassembled, he points out.

“Katrina cars are making it back into circulation,” Risley reports, “and with a flood car you don’t know what the risks are.”

Todd Hoffman, executive director of Scene of the Accident, Inc., notes that “some of the risks include bloodborne pathogens, toxic waste, heavy metal contamination, and toxic fumes omitted when cutting and welding.”

Vehicles inundated with New Orleans floodwaters are particularly troublesome because of the toxic waste materials that engulfed them for an extended period of time prior to receding. In addition to harsh chemicals and biological toxins, immersion is saltwater can corrode sensitive electronic components and remain undetected until the vehicle mysteriously fails along the road, Risley says, adding that SCRS officials need to study the lawsuit before reaching a decision on how to proceed.

Concerns over Katrina cars have been a subject of several industry advisories. “Unfortunately, even when the vehicles are removed from the water and dried, the potential for the spread of disease and sickness remains,” according to Risley. “This is an issue that everyone should be aware of because these vehicles are being sold, purchased and in some cases dismantled for parts all across the United States. Unfortunately, only a few states currently have laws to address this growing problem.”

Repairers can protect themselves from harm by donning the correct safety gear, says Hoffman, winner of the 2006 ABRN Leadership Award. “If handled properly there should be little to no additional risks to technicians working on these vehicles,” he observes. “The collision industry is still filled with technicians that do not wear any protection. This is evident by the increasing number of technicians that are diagnosed with cancer every year.”

Uncovering hidden histories

SCRS remains supportive of bipartisan legislative proposals being considered by the U.S. Senate and House of Representatives that would establish a national register of damaged and totaled vehicles.

“All too often an unsuspecting individual purchases a used car with a clean vehicle title that in actuality has been totaled, rebuilt and resold,” explains SCRS Legislative Committee Chairman Rollie Benjamin. “The proposed legislation will make it significantly more difficult to perpetrate this dangerous misrepresentation by making it easier for consumers and dealers to identify those vehicles that have reentered the market with a history of extensive damage.”

Provisions are built into the bills to ensure that the data pertinent to a repaired vehicle’s background be made easily available in a commercially reasonable, electronically accessible format. The expected outcomes are timely and complete vehicle history reports; better, more informed decisions by potential buyers regarding the safety and fair market value of used cars; and a reduction in the number of unsafe cars on the road, Benjamin says.

“Adherence to honesty, fair play and protection of the consumer’s best interests is the driving force behind the ongoing development of collision repair professionalism,” declares SCRS Chairman Farzam Afshar. “SCRS has worked to foster those principles from its inception, so it makes perfect sense to align with the parties working hard to see these bills through.”

The motoring public has been patient long enough, according to Public Citizen President Joan Claybrook, former chief administrator of the National Highway Traffic Safety Administration from 1977 to 1981. “How much longer will consumers have to wait before the federal government delivers what Congress asked for in 1992?”

“People’s lives are at risk because they are buying used cars that are missing air bags or have other critical safety defects due to their hidden histories as junked or salvaged vehicles,” Claybrook continues.

After passing the 1992 law under the leadership of then-Rep. Charles Schumer (D-N.Y.) calling for the national database, Congress shifted responsibility of establishing it to the Department of Justice in 1996 because the Department of Transportation had failed to make any headway, she recounts. “The move didn’t make a difference; the DOJ has now delayed more than 10 years without making progress on this critical source of information for consumers,” Claybrook says.

The lawsuit is being brought to spur issuance of long-overdue rules requiring insurers and salvage yards to provide data regarding totaled vehicles to a National Motor Vehicle Title Information System (NMVTIS).

A study commissioned by the justice department found that full implementation of NMVTIS would save the public between $4 billion and $11.3 billion each year, says Rosemary Shahan of CARS, one of the three consumer groups aligned in pursuing the recent lawsuit.

According to industry data she has compiled, an estimated 5 million vehicles are totaled each year. Millions more sustain major damage requiring extensive repairs without being totaled. Shahan says insurers are able to profit when these compromised vehicles are sold with clean titles that are “easy to launder across state lines.”