National Motor Vehicle Title Information System Resource Center (NMVTIS)

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2009-02-03T08:21:00.000-05:00

Lawsuit prompts action on national title information system

2009-01-29T20:43:00.000-05:00

Publish date: Jan 29, 2009
By: Brian Albright

The U.S. Department of Justice (DOJ) plans to require insurance companies, junkyards and salvage yards to provide information on totaled vehicles for the National Motor Vehicle Title Information System (NMVTIS) by the end of March. The DOJ is moving forward on NMVTIS after a federal judge ordered the department to provide public access to total loss information.

NMVTIS was established under federal law more than a decade ago to provide a way for state motor vehicle bureaus to share title information in an effort to curb the movement of stolen vehicles from state to state, and to prevent title fraud. While a number of states already provide data for the system, full compliance has lagged, in part, because of a lack of funding.

In February 2008, three consumer advocacy groups — Consumers for Auto Reliability and Safety, Public Citizen and Consumer Action — filed a lawsuit against the DOJ, claiming that the government’s failure to implement the provisions of the law put consumers in jeopardy. The lawsuit asked that the court set a timetable on implementation.

In September, Judge Marilyn Hall Patel, a federal judge in San Francisco, ordered the DOJ to provide public access to an electronic database that includes information on vehicles that have been declared a total loss by insurance companies. Shortly after the ruling, the department issued a notice of proposed rulemaking on NMVTIS that calls for insurance companies, junkyards and salvage dealers to provide VIN-based information on totaled or salvage vehicle vehicles by March 31, and update the information every 30 days.

When fully implemented, NMVTIS is expected to be more complete and less expensive than commercial services such as Carfax, Experian AutoCheck and VINCheck, and could help prevent “title washing,” the practice of moving a totaled or stolen vehicle across state lines and receiving a new title for the vehicle that omits any previous damage.

Because many states don’t check the title history of a vehicle when issuing a new certificate, information on the vehicle’s true condition can be hidden. In some cases, wrecked or flood-damaged cars are superficially repaired and resold to unwitting consumers. The lawsuit against the DOJ cited several instances of people being seriously injured or killed in subsequent accidents because they were driving these structurally unfit cars.

“The fact is that junk and salvage vehicles are being rebuilt and repackaged, and are being sold with ostensibly clean titles to consumers who have no idea that they may be driving a death trap,” says Deepak Gupta, the attorney for Public Citizen.

Bob Redding, Washington, D.C., representative for the Automotive Service Association, says that a national approach to the problem of title fraud will be good for both the repair and insurance industries.

“These kinds of things only make our industry better,” Redding says. “These vehicles and titles are moved across state lines on a regular basis. This state-by-state approach to insurance regulation has hurt the consumer and it’s hurt repairers, and this is one more move that helps create a more level playing field for the industry, for our customers and for insurers.”

The court ruling ordered the DOJ to finalize its implementation plan by Jan. 30. The system will include information on whether a title is valid, reported mileage, where the car was previously titled, and whether it was ever reported as a junk or salvage vehicle. Each state is required to perform a title verification check before issuing a new title.

Insurance carriers will be required to provide NMVTIS with the vehicle identification number of every vehicle declared a total loss, along with the date of the declaration and the name of the owner. The rule also clarifies the system’s funding.

Insurers, however, have complained that the reporting requirements would duplicate existing state record keeping, and that there are so many inconsistencies among state laws regarding salvage vehicles that the system would not eliminate the problem of title washing. In a release that seemed to generally support the idea behind NMVTIS, the Property Casualty Insurers Association of America (PCI) pointed out that insurance companies already provide this data to state titling agencies, making the new reporting requirements redundant.

“The overall purpose to gather and share title information between state titling organizations is one that we support. It would go a long way to solving the title washing issue,” says Bob Passmore, director of personal lines for PCI. “But each state has a salvage title law, and the most complete source of information on those vehicles is the state agency that issued the title. Asking us to report that information is duplicative.”

In fact, the proposed regulations would exempt salvage yards from the reporting requirements if they have already submitted vehicle data to the state motor vehicle bureau.

Passmore also points out that certain types of damaged or older vehicles would not turn up in insurance company records. “There are salvage vehicles out there that have nothing to do with an insurance claim,” Passmore says. “There are older vehicles that are exempt in some states from the salvage title law, or may not have physical damage coverage. There are also vehicles that have just reached the end of their useful life and are not suitable for resale. You will never get that information from insurers because they don’t have it.”

Slow adoption

Although NMVTIS was established under the provisions of the Anti-Car Theft Act of 1992 and the Anti-Car Theft Improvement Act of 1996, implementation has been delayed several times, despite the fact that a 2001 cost-benefit study by the DOJ found that NMVTIS could produce savings of $4 billion to $11.3 billion per year for consumers.

The purpose of NMVTIS is to provide an electronic means of exchanging title, brand and theft data among motor vehicle agencies, law enforcement, insurance companies and consumers. Currently, 33 states are involved in the system, with 13 fully participating, 12 regularly providing data, and eight more that are “actively taking steps to provide data or participate fully.” A number of state motor vehicle officials, though, have blanched at the cost of participating (states pay a fee to fund the system), and have questioned its effectiveness.

NMVTIS is currently operated by the American Association of Motor Vehicle Administrators.

There are other electronic initiatives underway to help disseminate total loss information, including a free public database set up by the National Insurance Crime Bureau (NICB) that launched in June 2008. NICB, an insurance industry-funded, not-for-profit organization set up to prevent insurance fraud and vehicle theft, offers total loss information via its online VINCheck service. The service only includes data from participating NICB members.

In 2006 and 2007, former U.S. Senator Trent Lott (R.-Miss.) and Rep. Cliff Stearns (R-Fla.) introduced legislation that would have provided consumer access to total loss information. The bills, which were drafted in response to the resale of flood-damaged vehicles after Hurricane Katrina, were never passed.

Redding said that once implemented, NMVTIS will be a powerful consumer protection tool. “Some private sector services have attempted to help with this issue, but the level of post-Katrina flood vehicles really added a new dimension to title fraud,” Redding says. “We’re not resolving problems like the titling issue on a state-by-state basis. It’s just not happening.”

NMVTIS History

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The Anti-Car Theft Act (the Act) of 1992 directed the U.S.
Department of Transportation to establish a national

information system enabling states and others to access automobile titling
information. In 1996, the Act was reauthorized, transferring the
responsibility for this system to the U.S. Department of Justice (DOJ). The
Act prescribes the ongoing responsibilities of DOJ in the operation and
oversight of NMVTIS. 49 U.S.C. § 30502(a)(1) directs the Attorney General to
establish NMVTIS to accomplish specific automobile titling information
objectives that specify

what information is to be made available and to whom.

NMVTIS was created to:

Prevent the introduction or reintroduction of stolen motor vehicles
into interstate commerce;

Protect states, consumers (both individual and commercial), and
other entities from fraud;

Reduce the use of stolen vehicles for illicit purposes including
funding of criminal enterprises; and

Provide consumer protection from unsafe vehicles.

National Motor Vehicle Title Information System (NMVTIS)
Participation Program (FY
2009 Competitive Grant Announcement)

Applications are due February 12, 2009

In 1999, the then General Accounting Office (GAO)
conducted a review of NMVTIS. The
GAO report
found that a life-cycle cost and benefits analysis should be conducted to
determine if further federal funding of NMVTIS was warranted.

In 2001, at the request of the Department of Justice, the
Logistics Management Institute (LMI) submitted a
report to DOJ's National
Institute of Justice, found that: "…NMVTIS-if it is fully implemented in all
50 states and the District of Columbia, and if it is 100 percent
effective-can achieve benefits in the range of $4 billion to $11.3 billion
annually."

In 2006, the Integrated
Justice Information Systems (IJIS) Institute, a nonprofit organization
made up of technology companies and formed to provide a single voice of
industry in the development of new standards and practices in the law
enforcement and justice information technology world, was asked by BJA to
conduct a full review of the NMVTIS system architecture to identify any
technological barriers to NMVTIS implementation and to determine if any
potential cost savings was available through emerging technology. The
IJIS Institute
report found that: "…the NMVTIS program provides an invaluable benefit
to state vehicle administrators and the public community as a whole.
Advantages of the program including improving the state titling process, as
well as providing key information to consumers and law enforcement
agencies."

New! State
Compliance Technical Alternative Available Soon!

Historically, the case has been made for states to fully integrate the
NMVTIS inquiries, updates, and data sharing into their titling processes and
systems. These integration efforts have, in some cases, created a burden on
states, as their title information systems required modification in order to
allow for the integration of NMVTIS inquiries and updates. In 2008, BJA
supported the development of a stand-alone access method that the states may
use to make NMVTIS inquiries without requiring changes to local information
systems with Internet capabilities. Stand-alone access is expected to
consist of a secure (password-protected) Internet-based access point
providing state titling staff access during a title transaction. The
information available is expected to include key title information a titling
agency would need to detect fraud or theft before issuing a new title.
Stand-alone access may also include the ability to query and respond with
additional title information residing in the state of record, although at
this time that specific functional capability has not been finalized. Once a
title transaction is made, the NMVTIS central file would be updated via the
daily or real-time batch upload process. The stand-alone inquiry technical
details have been made available to AAMVA and are now being developed into
an alternative "stand-alone" state connectivity application. It is expected
this method of connectivity will significantly reduce, if not eliminate, the
need for capital investments from the states in order to comply with the
requirements of the Anti-Car Theft Act.

Key Links:

Anti-Car Theft Act

National Motor
Vehicle Title Information System (NMVTIS) Final Rule

NMVTIS Administration

The Act authorizes the designation of a third-party operator of NMVTIS.
Since 1992, the American Association of Motor Vehicle Administrators (AAMVA)
has acted in this capacity and operates the system today. AAMVA is a
nonprofit, tax exempt, educational association representing U.S. and
Canadian officials responsible for the administration and enforcement of
motor vehicle laws.

For more information, please contact AAMVA at:

American Association of Motor Vehicle Administrators

4301 Wilson Boulevard, Suite 400

Arlington, VA 22203

703-522-4200

www.aamva.org

NMVTIS Funding

Federal law provides that NMVTIS should be supported through user fees and
not dependent on federal funding. The system operator is authorized to
assess and collect user fees not to exceed the cost of operating the system,
not permitting any profits to be made by the operator. The law details the
types of fees that may be charged and the basis for such fees. The operator
is required to notify users of such fees in advance and to account for all
fees collected.

Since 1997, more than $15 million in federal funding has
been provided to states and the system operator. During fiscal years
2007-2009, DOJ has issued a competitive funding solicitation, offering
states the ability to apply for direct funding from DOJ to participate in
NMVTIS. DOJ has also encouraged states to consider using Justice Assistance
Grant (JAG) funding, and has encouraged and funded state applications
submitted under the Edward Byrne Discretionary Grants Program.

Related Information:

National Motor Vehicle Title Information System (NMVTIS) Participation
Program (FY
2008 Competitive Grant Announcement)

Annual Performance and Financial Reporting

NMVTIS regulations require the system operator to prepare and publish an
annual report detailing system operation, and the collection and spending of
fees and other funds to operate NMVTIS. This report must also include a
status report on system implementation, compliance reporting, and detailed
financial information to determine budgeting and performance. The

regulations also require the operator to conduct an annual independent
financial audit and to publish the audit reports on this site. The purpose
of these reporting requirements is to ensure that NMVTIS is operated with
transparency and accountability.

NMVTIS Governance

NMVTIS is a DOJ program and DOJ is fully responsible for NMVTIS policy and
operations. To ensure that it make informed decisions regarding the
operation of the program however, DOJ will convene a NMVTIS Advisory Board
that will include representation from all of the stakeholder communities
affected by the program-states, consumers, insurance carriers, auto
recyclers, junk and salvage yards, and law enforcement agencies. The NMVTIS
operator will also be represented on the Advisory Board. The Advisory Board
will make recommendations to DOJ regarding NMVTIS and may be asked to make
recommendations regarding program operation and administration issues, such
as establishing NMVTIS performance measures, accessing additional data
within the system that is not required by the Anti-Car Theft Act, assessing
program costs and revenues, and quality assurance. More information
regarding the NMVTIS Advisory Board will be posted in this location in the
near future.

Search Vehicle History Now.

2008-02-01T19:04:00.007-05:00

Auto Data Direct, Inc.

Carco Group, Inc.

To conduct a NMVTIS search, select a provider (listed above).

As additional providers are added, they will also be listed here.

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Contact Us.

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National Motor Vehicle Title Information System . net
2316 Delaware Avenue, Suite 228
Buffalo, New York 14216

Toll Free 1-888-477-9779

mailto:nmvtis@appliedinnovativesolutions.net

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About Us.

2008-02-01T18:43:00.006-05:00

NMVTIS National Motor Vehicle Title Information System . net is brought to you as a public service and is sponsored by Applied Innovative Solutions LLC, a technology research and development company located in Buffalo, New York.

Applied Innovative Solutions, LLC creates GPS Vehicle Tracking technology that helps locate stolen vehicles.

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