As mentioned in the Mission Statement, one of the purposes of the Dallas County Automobile Dealers Association (DCADA), is to improve the Public image of automobile dealers. Another part of that mission is to disseminate  valuable information to dealers and the general public. Helping the public become better educated about circumstances and problems within the industry can only serve to make the industry better thus improving the image of the independent dealer. Please let this article serve as a sincere effort to inform dealers and the general public in order that they will be better prepared to avoid a problem sale.

Curbstoners Injure the Reputations of Legitimate Dealers

Although there are many issues which may warrant more attention, there is none which has caused more grief to the consumer and cause more injury to the reputation of legitimate dealers. This issue is known as the practice of "Curbstoning". "Curbstoning" is a term given to the practice of buying and selling automobiles on a regular basis, but without a dealer license and legally established place of business. Routinely these "Curbstoners" buy usually "low end" vehicles from new or used car dealers, public and salvage auctions and park them in high traffic locations. Often these locations are on State right of ways, utility easements, Public and private parking lots, from the side of the road, on school property or at private homes. Auto body repair shops and other industry personnel make up a large percentage of the violators. Some curbstoners may hold a dealer license, however, the since the practice of curbstoning violates the Texas Motor Dealer Law and is cause for suspension of said license, the scruples of such a violator should be questioned.

Are Curbstoners Criminals? In many cases, the answer is: Yes!

The most common crime committed by Curbstoning is Tax Fraud. When a Curbstoner purchases a vehicle, he or she will usually cause the title to be left blank or "open". This allows the Curbstoner to "skip" his or her name when selling the vehicle to an unsuspecting consumer. By not having his name on the title, the curbstoner is able to pocket the money (usually cash) and avoid State Sales Tax, Federal Income Tax and any other declarations that are legally required. This is a direct conflict with the American System of Taxation and Free Enterprise.

In many cases when the purchaser discovers a problem due to undisclosed errors on the title reassignment, the Curbstoner is usually long gone or doesn't act in a responsible manner when asked to straighten out the problem. If a consumer purchases a vehicle which will not comply with State and Federal Emissions Requirements they may not be able to get the vehicle registered without first spending hundreds of dollars on repairs. Further, serious injury or death could occur if a vehicle is sold with a defective or "removed" air bag. The following link may provide more insight into such problems with air bags. http://www.consumeraffairs.com/news02/bags.html

In general, the most common types of Fraud are Odometer Tampering, Undisclosed Frame Damage, Faulty or Non-existent Air Bags, Flood Damage, Faulty or Removed Emissions Components, Faulty Safety Devices, Faulty Anti-Lock Brake Systems, Undisclosed Mechanics Liens or Promissory Liens and other problems that were not truthfully disclosed at the time of sale. The State of Texas Department of Transportation provides a free database which contains a listing of vehicles which have been flood damaged. This database can be searched for free by clicking on the following link. http://www.dot.state.tx.us/vtr/flood/flddamg.htm

Illegally Parked Vehicles Create Hazardous Traffic Conditions

Another problem which is caused by Curbstoning is Hazardous Traffic Conditions. This is especially true when Curbstoners operate from the side of busy freeways, farm to market roads and other areas which were not designed to have direct access from the roadway. Law enforcement officers will tell you, Curbstoner vehicles and roadside vendors cause an increase in the number of serious accidents. Highway Planners and Engineers design roadways in a manner that allows for efficient and safe traffic flow. This includes proper placement of Roadway Signage, Safety Signals and Lane Markings which are intended for general safety.  Unfortunately, none of this matters when a Curbstoner and other types of vendors "set up shop" within a few feet of a paved roadway. Many accidents are caused by persons entering and exiting such sites simply because it its difficult to exit from or merge, with moving traffic.  When visiting an illegal site, it is not uncommon to see pedestrians walking or standing within a few inches of fast moving vehicles on the roadway. Such conditions are even more dangerous as pedestrians are not likely to be paying attention to traffic conditions if they are trying to inspect a vehicle or read the phone number on a small For Sale sign. Likewise, traffic is often disrupted when a vehicle abruptly slows when trying to enter a narrow or unmarked driveway.

DCADA strongly suggests that all consumers should make sure they know who they are dealing with, before, making a purchase. DCADA would like to point out that legitimate dealers operate only from an established place of business and never from a parking lot or the side of the road. In Texas, Dealers are required to secure a $25,000.00 Bond before they are granted a license. Licensed Dealers who offer financing must also have a License from the Office of the Consumer Credit Commission. To obtain such a license the Dealer must go through a lengthy process of identification and a background check which includes fingerprint identification. Legitimate dealers will have no problem in proving they are properly licensed and are likely to be eager to show proof of such license if asked. This is another way of saying; a Dealer who has made the effort to secure a legitimate dealer license should be proud and readily able to prove it.

Dealers should frequently verify the license status of vendors.

New and used car dealers are advised to make periodic inquiries in order to verify the validity of the license status of persons they do business with. Once per year verification is not always enough as a license may be revoked or suspended at any time during the year. It is not uncommon that a wholesale or retail dealer may have allowed their license to expire or otherwise, have it revoked or suspended. Once a license has been revoked or suspended, the (once licensed) dealer is not likely to inform Auctions, Franchised Dealers or Suppliers. Dealers who sell to a canceled/revoked/suspended dealer (without registration and collection of tax) are in direct violation of the Motor Vehicle Dealer Law. This may leave the selling dealer "unprotected" as the suspended/canceled Dealer?s Bond may become invalid at the time of suspension or cancellation.

Selling to Unlicensed Dealers May Create A Liability?

Dealers should be aware that in cases where a title reassignment has been "skipped", the Dealer which had "supplied" the Curbstoner with vehicles for resale may eventually be held liable for unpaid taxes or fees. Selling to an unlicensed dealer is the same as selling to a retail customer in that the selling dealer is responsible for collecting the appropriate taxes and making sure the vehicle has been properly assigned to the new owner.

Other types of liabilities that Dealers should consider may occur when a consumer has suffered from faulty air bags, anti lock brakes, etc., lawyers will usually go after, everyone involved, when a consumer files suit in personal injury cases. In cases where the curbstoner has removed his/her name on the title reassignment, the vehicle may have the appearance of having been sold by the dealer that supplied the curbstoner. Such cases may not hold water but its a good reason to use caution when dealing with wholesalers. This is why it is strongly suggested that all Dealers, "know who they are doing business with".

Dealers can also help to curtail the problem by making sure their title clerks us "ink" ribbons in the typewriters which are used to fill out title reassignments. Although "carbon" ribbons are popular, titles which have been reassigned with typewriters which use "carbon" ribbons are easy to alter with error correction tape. One simple alternative is to have the title clerks reassign titles with permanent ink. Of course, this wouldn?t be necessary if dealers wouldnt do business with suspected curbstoners.

It should be noted that DCADA is not implying that License Wholesale Only Dealers are Curbstoners. It is only being mentioned as many Curbstoners may project the appearance of being legitimate Wholesale or Retail Dealers. New Car Dealers should be aware of this fact and frequently make sure their wholesale customers are properly licensed. Verification can be made by contacting the Texas Department of Transportation. The contact information is listed below.

Report a suspected Violator.

DCADA would like to recommend that all suspected cases of curbstoning activity be reported to the Texas Department of Transportation  Motor Vehicle Division- Enforcement Section. The complete address for such complaints can be found at the end of this article.

The Enforcement Section would like complainants to know, although curbstoning cases often take a considerable amount of investigation before citations are issued, arrest are made or other legal action is taken, all cases are eventually worked until their resolve. Such delays may be caused by the involvement of other agencies such as the Internal Revenue Service. Although DCADA does not officially get involved with such cases, it may be helpful to send a copy of the complaint to the DCADA office.

Complainants will be glad to know they may opt to remain anonymous if desired. However, the Motor Vehicle Enforcement Section advises in anonymously reported cases, the complainant will not be able to track the progress of their complaint. Sending DCADA an anonymous copy of the complaint may allow the progress to be tracked by DCADA or a designated third party and thus cause a faster resolve.

More information can be found at the Texas Department of Transportations Enforcement Section Website which can be accessed by clicking on the following link. http://www.dot.state.tx.us/mvd/enforcement/information.htm t theIn closing, it should be known that DCADA is not opposed to private individuals who are selling their personal vehicles, provided the vehicles have been properly registered in their name with taxes having been paid and ownership properly documented.

Texas Department of Transportation

Motor Vehicle Division

Enforcement Section

PO Box 2239

Austin, Texas 78768

512-416-4800 Telephone

800-687-7846 Toll Free

512-416-4891 Fax