C.A.R.S. Litigation

Making Buying a Used Car Less Risky for Consumers
CARS, Public Citizen, and Consumer Action vs. Michael Mukasey,
Attorney General / U.S. Department of Justice
CARS won against the US Dept. of Justice, so insurers and junkyards are required to report stolen vehicles, total loss wrecks, and flood cars to a publicly accessible database.   Image by perthhdproductions via CC 2.0 license.
       In reaction to burgeoning auto theft, and salvage fraud involving dangerous rebuilt wrecked or flooded cars, in 1992 Congress passed the Anti Car Theft Act. The Act required the U.S. Department of Justice to create the National Motor Vehicle Title Information System (NMVTIS), a publicly accessible online database. The Act also required NMVTIS to include up-to-date vehicle-history information provided by state motor vehicle departments, insurance companies, self-insured entities such as rental car companies, recyclers, and junk and salvage companies like Copart and Insurance Auto Auctions.

       According to a cost-benefit analysis commissioned by the DOJ, when NMVTIS is completed, and fulfills its potential, it will save the American public up to $11.7 billion annually, by reducing auto theft, salvage fraud, and related crimes.

       Simply by checking NMVTIS online, used car buyers would be able to instantly check the vehicle's title, verify its mileage, and learn whether it had been stolen or was a junked or salvage (total loss) vehicle. But under pressure from the insurance industry and auto dealers who profit from salvage fraud, the DOJ stonewalled and defied Congress. As a result, 16 years after the federal Act became law, the Department of Justice still failed to issue regulations to require reporting of vehicle history information by junk yards and insurance companies, and didn't make any vehicle history information accessible to consumers.

       In 2008, Consumers for Auto Reliability and Safety, joined by Public Citizen and Consumer Action, filed a lawsuit to compel the Justice Department to implement the database. CARS was represented by attorney Deepak Gupta, who was then working for Public Citizen. He represented us brilliantly.

       In September, 2008, the federal district court in San Francisco issued an order requiring the DOJ to establish consumer access and issue regulations by January 30, 2009. The DOJ complied, and we worked closely with the agency in drafting the rules. Those rules required that information about total loss vehicles from insurers, junk yards, and salvage yards be reported to the system by March 31, 2009, and be updated at least every 30 days. Many entities report VIN-specific information daily.

Supporting documents:

Complaint in Public Citizen v. Mukasey (02/06/2008)

Plaintiff's Motion for Summary Judgment (08/12/2008)

Plaintiff's Opposition to Defendant's Motion for Judgment (09/04/2008)

Order (09/30/2008)

Memorandum and Order (10/09/2008)

Pennsylvania Position on Consumer Access (01/27/2009)

California Restrictions on Consumer Access (01/27/2009)

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Buyer Beware! Auto dealers use
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Even when car dealers flagrantly violate consumer protection laws, you may not be able to get justice. That's because almost 100% of car dealers stick "forced arbitration" clauses into their contracts. If they cheat you, and you try to take them to court, they can just laugh at you. That's because they can get your case kicked into arbitration -- a secret, rigged process that favors big, corrupt lawbreakers. The dealer often gets to choose the arbitration firm, and even the arbitrator who hears your case. Unlike judges, arbitrators are perfectly free to ignore the law.

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