2019 NAMVBC Fall Workshop Features Panels on Internet Vehicle Sales and Dealer License Fraud

The National Association of Motor Vehicle Boards and Commissions (“NAMVBC”) held its annual fall workshop from September 19-21, 2019 in Sacramento, California. The three day workshop featured panel discussions about internet sales, dealer license fraud, and other emerging issues confronting regulators and the motor vehicle industry, and opened with remarks from David S. Kim, Secretary of the California State Transportation Agency (“CalSTA”), and a keynote address from Elissa Konove, undersecretary at CalSTA.

During the workshop, the Internet Vehicle Sales Working Group from the American Association of Motor Vehicle Administrators (“AAMVA”) previewed their forthcoming white paper on best practices for internet vehicle sales by dealers. Paula Shaw, Executive Director of the Tennessee Motor Vehicle Commission, and William Childress, Executive Director of the Virginia Motor Vehicle Dealer Board, told the audience that the white paper will address the challenges presented by internet vehicle sales, including jurisdictional disputes when vehicles are sold across state lines, cooperation between law enforcement agencies, and ensuring adequate disclosure to prospective customers and preventing consumer fraud. Ms. Shaw and Mr. Childress reported that the AAMVA expects to publish the white paper before year end.

Another panel reported on an increasingly common dealer licensing scam in which individuals obtain wholesale dealer licenses in states with less restrictive regulation and use those licenses to buy used cars at auctions around the country. Although restricted to reselling cars to other dealers, these wholesale dealers then resell vehicles bought at auction to consumers, often across state lines via the internet. Michael Domke, Section Chief of the Dealer and Agent Section of the Wisconsin Department of Transportation’s Bureau of Vehicle Services, warned that wholesale dealers who engage in the unauthorized resale of these vehicles to consumers distort the auction and used car markets to the detriment of the industry and consumers alike.

The workshop attracted over 175 attendees from across the country, including representatives of state regulators, OEMs, industry trade associations, and dealers, and was the most heavily attended meeting in NAMBVC history. NAMVBC is a non-profit corporation formed to assist members in interpreting state laws and regulations relating to motor vehicle dealer licensing; according to its mission statement, NAMVBC is dedicated to “promoting fair, reasonable and uniform laws among the states with respect to the distribution and marketing of motor vehicles in order to prevent frauds and unfair business practices, and to promote and maintain a fair and sound system of distribution of motor vehicles to the public.”