VA Dealer Board Looks at Dealer Practices, Records & Advertising

VA Dealer Board Looks at Dealer Practices, Records & Advertising

In a lengthy meeting on July 9, 2007 at the DMV headquarters in Richmond, the Virginia Motor Vehicle Dealer Board (MVDB) addressed the following issues:

Dealer Practices. Two cases involved dealers who had been the subject of civil fraud actions by consumers. MVDB can separately take action against a dealer who has been found liable for a fraudulent act. Under MVDB policy, the board will not commence a proceeding against a dealer who has been found liable for fraud in a civil action and has paid a judgment in full, absent an MVDB finding of special circumstances justifying a proceeding.

In one case, MVDB considered a dealer matter that commenced before the issues had been settled with the customer. Even though the matter was eventually settled, the MVDB proceeding continued. The hearing officer found no basis for a violation, and the board agreed.

In the second case, MVDB considered the case of a used car dealer who had been found responsible for damages in a fraud action. The board noted the seriousness of the allegations involving sale of a reassembled vehicle and potential odometer violations. Because this was the second such matter for the dealer, MVDB voted to institute a proceeding to consider the impact of the dealerês actions and whether board action should be taken against the dealer.

In another action, MVDB considered a series of failed inspections by a dealer who concentrated on internet sales. It appeared that the dealer did not have sufficient facilities as required by law. The board voted to suspend the license of this dealer until the dealer and the dealer operator attended dealer operator classes and until the dealer could show it has facilities required by law.

Dealer Records. Since its inception, MVDB has had the authority to allow dealers to store certain records off site. The board has regularly granted waivers allowing such off-site storage, provided copies of the records are kept at the dealership. Given recent changes to the law involving customer privacy and information safeguarding, and given technological changes, the board has decided to review its policy concerning the requirements necessary to be followed in the event of a request for waiver of the on-site storage requirement. MVDB directed staff to make a Recommendation for the September meeting of changes that could be implemented to ease the record-keeping burden on dealers while enhancing the security of customer and employee information.

New Car Advertising. MVDB considered a recent decision of the Virginia Supreme Court concerning new car advertising. That case had found that board policies, which seemed to allow dealers to show limited availability of new cars by use of stock numbers, were in conflict with the statute that allows use of stock numbers to show limited availability of new cars only if the ad –clearly and conspicuously” applies to one vehicle. This decision, binding on all courts in Virginia, throws into question the practice of advertising new cars by stock number to show limited availability. Because of the uncertainty caused by this decision, dealers should disclose the number of new vehicles available at the price advertised. It is recommended that price advertising for a particular new vehicle should be accompanied by the disclosure –one at this price, stock number xxx.”

Temp Tags on Demand. MVDB reviewed a presentation by a company that permits printing of temporary tags online at the dealership. The temp tag is printed on standard copy paper, and then it is slipped into a heavy duty plastic sleeve that is affixed to the vehicle. MVDB expressed its support for this approach because of its convenience and enhanced security. The Virginia DMV hopes to have the system available for use by dealers by the end of 2007.