Welcome to the Department of Justice, Iowa Attorney General Tom Miller

For immediate release -- Friday, March 27, 1998.

Miller Leads Challenge to Auto Salvage
Bill Pending in U.S. Senate

"This bill is a wolf in sheep's clothing," says the Iowa Attorney General. "Auto salvage fraud is the greatest consumer concern facing used car buyers, but this bill will provide less protection than many consumers have now."

Iowa Attorney General Tom Miller and Attorneys General from 31 other states and Puerto Rico issued a letter to the U.S. Senate today urging Senators to reject a bill purporting to regulate the sale of damaged used vehicles -- a bill the Attorneys General say is badly flawed and would leave consumers and auto dealers in many states with less protection than they have now.

The letter -- which was drafted and circulated among the states by Miller's Consumer Protection Division -- calls auto salvage fraud "the greatest consumer problem facing American used car buyers." It cites estimates that the sale of rebuilt or salvaged motor vehicles as undamaged costs consumers and the industry $4 billion a year and raises serious safety concerns.

"When a car or truck is damaged by a wreck or a flood, and the damage is not disclosed, consumers unwittingly pay far more than the vehicle is worth," Miller said. "Even worse, they may be putting their families in danger."

The bill was approved by the Senate Commerce Committee last year and could be debated at any time this spring. The bill would provide certain nationwide standards for titling and selling salvage vehicles.

"It is being sold as a pro-consumer bill," Miller said, "but this bill is a wolf in sheep's clothing. It will leave many consumers with less protection than they have now."

The Attorneys General volunteered to work with senators on alternatives to the bill, and they suggested using as a model the federal odometer enforcement scheme, which established minimum federal standards while allowing States to impose additional requirements.

The letter submitted by the State Attorneys General cites several reasons for concluding "the bill is not good for consumers":

  • The bill "attempts to set a ceiling instead of a floor of consumer protection for the states to follow." States following the federal scheme and definitions would not be allowed to title cars as salvage if they are worth less than $7,500 and are more than six years old, according to the bill. Standards in some states give significantly stronger protection to consumers.
  • The federal scheme (covering only cars worth more than $7,500 or less than six years old) doesn't include the majority of used cars in the U.S. today and denies protection to vulnerable citizens who are unable to buy newer, more expensive vehicles.
  • The bill does not authorize consumers to go to court to get refunds if a car seller lies to them about whether the car was on a salvage title, and it does not authorize State Attorneys General to obtain relief for consumers.
  • States could opt to retain their own stronger regulatory schemes instead of adopting the federal levels -- but they would face an unpleasant choice: forgoing federal funding to participate in the National Motor Vehicle Title Information System, or having to print what the letter called "a misleading statement" on auto titles that "This state does not conform to the uniform Federal requirements of the National Salvage Motor Vehicle Consumer Protection Act."
"In other words, the bill would leave many states with three choices -- all bad," Miller said. "First, states could choose to retreat to the inadequate standards in the pending Senate bill. Second, we could keep our state standards but have to give up federal funds for the National Title Information System, a system that will be extremely helpful for states and citizens to learn the title history of a vehicle. Third, we could keep our stronger state standards but be required to print the statement on all our titles that we don't 'conform' to the Federal requirements. would find that offensive," Miller said.

The letter from the Attorneys General to the Senate said the bill, S.852, would not diminish auto title fraud in the U.S. "because it sets weak standards, attempts to limit the states' flexibility in dealing with salvage cars, and fails to provide sufficient remedies."

The Attorney Generals' letter noted that many national consumer groups oppose the bill, including the Consumer Federation of America, the Center for Auto Safety, Consumers Union, the National Association of Consumer Advocates, Consumers for Auto Reliability and Safety, and the U.S. Public Interest Research Group. The National Association of Attorneys General has adopted a resolution regarding auto salvage legislation.

The letter was signed by the Attorneys General of Puerto Rico and 32 states: AZ, AR, CT, DE, FL, IL, IN, IA, KS, MD, MA, MI, MN, MT, NV, NH, NJ, NM, NY, ND, OH, OK, OR, PA, RI, SC, TN, TX, VT, WA, WV, and WI. It was also signed by the Hawaii Office of Consumer Protection.