WITNESSES CALL FOR NATIONAL DATABASE FILLING GAPS IN STATE LAWS AND FOR NEW FEDERAL LEGISLATION

Washington, Mar 1, 2006 - "The practice of passing off flood-damaged or salvaged vehicles as ready for the road through cleaning or 'washing' their titles is a serious problem for consumers," stated Rep. Cliff Stearns (R-FL), Chairman of the Commerce, Trade & Consumer Protection Subcommittee. "'Title washing' allows a thief to eliminate effectively negative title 'brands' such as 'salvaged' and 'flood damaged' from an imperfect title. It seems to me that the problem of title fraud in one that can be solved, or at least greatly reduced, by allowing greater and more immediate access to information about a car's history, as well as creating more uniform standards nationwide for title branding designation, like salvaged and flood damaged."

Testifying for the Consumer Federation of America, Rachel Weintraub, Director of Product Safety and Senior Counsel, outlined the problem. "Natural disasters such as Hurricanes Katrina, Rita and Wilma resulted in approximately 570,000-600,000 flood-damaged vehicles. Most of these vehicles are grossly unsafe and beyond repair: the electronic components will corrode; the air bags may not inflate on collision; the brakes and seatbelts may not work. However, each year millions of severely damaged vehicles are not destroyed, but rather are sent by unprincipled insurers to auto auctions where they are sold to unscrupulous auto dealers and rebuilders."

Robert M. Bryant, President & CEO of the National Insurance Crime Bureau, identified one of the major factors contributing to this fraud, "We remain vulnerable for one simple reason. Some state motor vehicle titling procedures are lax which makes it easy to commit vehicle crimes that involve title washing."

Glenn Turner, Chief of Staff, Florida Division of Motor Vehicles, who testified for the American Association of Motor Vehicle Administrators, offered two solutions: "increased state participation in the federally mandated National Motor Vehicle Title Information System (NMVTIS) and uniform salvage branding legislation."

Concluded Stearns, "Do we need federal legislation? It is clear from this testimony that the states need to strengthen their titling procedures and require providing title data to a national database empowering buyers, both consumers and dealers, with this information. I strongly believe that knowledge is power. We need to engage the private sector data industry and their best practices to find better ways to inform and protect consumers. Perhaps a technology such as Radio Frequency Identification (RFID), which uses radio waves to transmit data from a transmitter called a 'tag' to a scanning device called a 'reader' that can be networked with a computer database could be useful. However, I will carefully monitor progress in this area, and I will keep in mind the proposals for federal legislation."