Consumer Law

Consumer Groups Sue Justice Department Over Auto Database

By Deepak Gupta

by Deepak Gupta

1992, Congress required the federal government to set up a comprehensive national database covering the title-, theft-, and damage- history of used cars, based on data from insurance companies, junk and salvage yards, and all 50 states.  A consumer thinking about buying a used car would be able to instantly check the validity of the car's title and odometer reading and learn whether it had been stolen or severely damaged in the past.  Making that kind of information widely available would dramatically reduce the amount of auto fraud and save consumers from economic loss and physical injury.

But more than fifteen years since Congress first required the federal government to implement the database, the government still hasn't done it!

Yesterday, we filed a lawsuit against the U.S. Department of Justice, asking the federal district court in San Francisco to force the government to do what Congress required it to do. Public Citizen was joined in the suit by two other national consumer groups -- Consumers for Auto Reliability and Safety (CARS) and Consumer Action. You can read our complaint here and find additional information about the case here, here, and here.

Here's what Senator Chuck Schumer (D-NY), the lead sponsor of the original 1992 legislation, said in a statement released yesterday:

"We all know that you can't always judge a book by its cover and the same is true with many used cars that end up at junk and salvage yards. Consumers deserve to know the true origin and condition of the vehicles they are purchasing, including whether that car was once stolen.

It is simple: for sixteen years, the Department of Justice and junk yards have been eschewing their responsibility to consumers, law enforcement, and the public by ignoring their mandate to routinely file the required reports. It is about time that all parties were forced to comply with what I believe is a common sense measure to fight auto theft and to protect the public from fraud. I am encouraged by Public Citizen's efforts on this case, and I hope that this important law will finally be enforced as it should have been from day one."

Our lawsuit is straightforward: We're asking the court to declare that the federal government has violated the law by failing to take three specific actions that Congress required it to take: (1) set a start date for reporting of information to the database by insurance companies and junk and salvage yards, (2) issue regulations to facilitate that reporting, (3) provide instant and reliable access to that information to consumers. The suit is based on the Administrative Procedure Act and alleges agency action unreasonably delayed or unlawfully withheld, as well as action that is contrary to law. We're asking the court to hold the government's feet to the fire by issuing an injunction that ensures that these actions are carried out promptly.

Under the leadership of Senator Schumer, Congress originally required the establishment of the database in the Anti-Car Theft Act of 1992, setting a statutory deadline of January 31, 1996. When it became clear that the government had missed its deadline, Congress took immediate action. In January of 1996, Congress entrusted the responsibility for setting up the database to the Attorney General, and set a new deadline of December 31, 1997. It?s now been over ten years since that second deadline, and the government has not yet set a start date for reporting by insurance companies or junk and salvage yards, has not yet issued the regulations that Congress told it to issue, and has not yet made any vehicle-history information available to consumers.

The importance of the information we?re talking about can?t be overemphasized. Congress mandated that insurance companies and junk and salvage yards send reports every month on their inventory of junk and salvage vehicles. Salvage vehicles are defined as vehicles that are damaged (e.g. by a collision, fire or flood) and for which the cost of repair would be more than the vehicle?s pre-damage value. Junk vehicles are defined as vehicles that can?t operate on public streets and that have no value except as a source of parts or scrap.

The fact is that junk and salvage vehicles throughout the nation are rebuilt, repackaged, and sold with ostensibly clean titles to consumers who have no idea that they may be driving a death trap. (Yesterday, several consumers from around the country told their stories of their experiences with salvage fraud; you can read those stories here:  Sgt. Rosa-La Williams of Honolulu, HI; Katherine Green of Pontiac, IL; Zonya Jones of Waynesboro, VA; Alicia Purvis of Baton Rougle, LA; and Jed Faulkner, of Farmville, VA.

The database that Congress mandated is a common-sense solution to an enormous public safety problem.  The government?s failure to implement it is inexcusable ? this information is out there, the law requires it to be made available, it has been more than ten years since the last deadline set by Congress, and there are no legitimate technical or funding obstacles in the way. And most importantly, this information will save lives.  We'll let you know what happens with the suit.

Full post as published by CL&P Blog on February 07, 2008 (boomark / email).