November 2021 | Peak Auto Auctions

Hmm… Does that Car belong to a member of the Military?

It happens. You’ve towed a vehicle into your lot and attempted to notify the owner and lienholder to have it picked up with no luck. You notice there’s a bumper sticker on it that says Look Sharp, Be Sharp, Go Army! Do you move forward with taking possession of the vehicle? Not so fast! At this point you want to make a good faith effort to verify whether this vehicle is owned by an active member of the military.

SCRA

According to the U.S. Department of Defense’s official Servicemembers Civil Relief Act (SCRA) Website, the Servicemembers Civil Relief Act (SCRA) (50 USC App. § 3901 et seq, as amended), formerly known as the Soldiers’ and Sailors’ Civil Relief Act of 1940, provides members on active-duty status with important safeguards in areas of financial management that include rental agreements, security deposits, evictions, installment contracts, credit card interest rates, mortgages, civil judicial proceedings, income tax payments, etc. SCRA website enables financial service providers to determine if an individual is eligible for the provisions of SCRA.

Penalties…

That includes enforcement of liens on an impounded vehicle without a court order if the vehicle is owned by a service person. In statements issued by the Department of Justice last fall, they reported on multiple cases of tow companies having to pay significant civil penalties and additional compensation for the vehicle owner because they auctioned off vehicles and violated SCRA.

Summary

You can go to https://scra.dmdc.osd.mil/scra/#/home. This is a free service but requires that you have the date of birth and social security number of the serviceperson.

A second website called the Servicemembers Civil Relief Act Centralized Verification Service provides search results without birthday and social security number, but there is a fee of nearly $39 per search. That site can be found at https://www.servicememberscivilreliefact.com.

It doesn’t happen often, but when an active service member’s vehicle is impounded and sold without their knowledge, the penalties and compensation for violations can cost a tow company thousands of dollars. Better to spend a little time and money in advance to avoid a financial disaster later.

Why Every Tow Company Should Get Acquainted With NMVTIS

NMVTIS. DOJ. AAMVA. JSI. It’s like an alphabet soup of acronyms but it’s something every tow company needs to be aware of. The National Motor Vehicle Title Information System (NMVTIS) was authorized in 1992 when Congress passed the Anti-Car Theft Act. Its purpose was to prevent and reduce fraud and theft, and importantly to protect consumers from unsafe vehicles. With passage of the Anti-Car Theft Improvement Act in 1996 oversite of NMVTIS was transferred to the U.S. Department of Justice (DOJ) and the American Association of Motor Vehicle Administrators (AAMVA) became the system operator in 1998. The system became active in 2009 after a pilot project of the state program was conducted and determined to meet that Act’s objectives.

Got Title?

NMVTIS rules require states to provide their titling information and establish a practice of performing a title verification check through NMVTIS before transferring a title or issuing a title to an individual or business who say they purchased a vehicle in another state. Currently 49 states and D.C. participate in the system. In addition to these requirements on state DMVs, NMVTIS also requires that any entity (including tow companies) that handle more than five junk, salvage, or insurance (JSI) total loss vehicles per year must report those vehicles into NMVTIS within a month or possibly face a fine of $1,000 per incident. This data, provided by the private entities, result in brands on the vehicle so a consumer knows if something significant has occurred with the vehicle.

Reporting…

A consumer can purchase a NMVTIS vehicle history report which provides basic information about the vehicle (year, make, model), a title history that includes where and when the vehicle was titled (which state, date the new title was issued, and the odometer reading.) The brand section is where the JSI data is included. Brands include previous salvage, rebuilt, junk, flood and other occurrences that identify the vehicle’s prior condition. This alerts consumers who are thinking about purchasing a used car to any safety issues it may have.
So how do you avoid that $1,000 penalty for not reporting? Report! There are four entities authorized by the DOJ as consolidators of the JSI information. That means you set up an account with one of them and input the required data and that entity reports the information to NMVTIS for you. There are four consolidator entities: Auto Data Direct, ISO, Audatex, and AAMVA.

More Information

For more information about NMVTIS and how to report visit:

National Motor Vehicle Title Information System (NMVTIS) – American Association of Motor Vehicle Administrators – AAMVA

Does that car belong to a member of the Military?

Hmm… Does that Car belong to a member of the Military?

SCRA

Penalties…

Good Faith?

Summary

Are you Acquainted with NMVTIS?