Press Release September 29, 1999	Contact: David Butler (202) 462-6262 Consumers Union Washington, DC Office

 

WASHINGTON, D.C. - Hurricane Floyd left over 30,000 damaged automobiles in its wake, some of them totally submerged in water, fertilizer, motor oil and other contaminants. These vehicles could be resold to unsuspecting consumers without them knowing anything about the flood damages.

There is no national standard for the resale of salvaged automobiles, leading unscrupulous auto rebuilders to patch together seriously damaged vehicles in one state, then move them to another state to secure a clean title that gives the buyer no clue of the vehicles' history.

The practice is called "title washing" or "lemon laundering." It poses a serious problem to consumers in Hurricane Floyd's aftermath, according to Consumers Union, the publisher of Consumer Reports magazine.

"The floods from Hurricane Floyd could send a flood of 'lemons' into the used car market, and you could wind up buying one in another state without being told about the damages," said Sally Greenberg, senior product safety counsel for Consumers Union.

Consumers Union joined with Consumers for Auto Reliability and Safety (CARS) today to call on Congress to approve a national standard to protect consumers against unknowingly purchasing a vehicle that has been rebuilt after sustaining substantial damage in an accident.

Senator Dianne Feinstein (D-Calif.) is sponsoring a bill that would set such a standard in order to stop the practice of "title washing" of these so-called "rebuilt wrecks." Feinstein's bill would provide nationwide written disclosure for every vehicle sale of previous salvage and major damage.

Feinstein's bill would provide widespread coverage for all vehicles including vehicles of any age or value, motor homes, pickups, and motorcycles. It would allow states to maintain existing salvage laws and strengthen the federal rebuilt vehicle database to promote instant access to vehicle accident histories for consumers, dealers, and law enforcement.

It would also require certification by a qualified repair facility of the proper repair of any salvage vehicle before it is returned to the road.

Several consumer groups, including Consumers Union, CARS, Center for Auto Safety, Consumer Federation of America, and the National Association of Consumer Advocates have endorsed Feinstein's bill, entitled the Salvage and Damaged Motor Vehicle Information Disclosure Act.

Meanwhile, Senate Majority Leader Trent Lott (R-Miss.) is sponsoring his own bill to address the problem of "title washing". Lott's bill has received harsh criticism from consumer groups, saying the bill lacks strong consumer protections because it is riddled with loopholes. For instance, Lott's bill would allow states to opt out of the system, meaning if one state opt outs, that may be a state where titles are washed, defeating the purpose of a national standard.

"Auto salvage fraud poses a serious threat to consumers, especially in light of the thousands of cars damaged by Hurricane Floyd that could wind up on used car lots across the country," said Greenberg. "Congress needs to approve a strong national standard for the resale of these 'rebuilt wrecks' for the sake of protecting consumers."

Consumers Union, publisher of Consumer Reports magazine, is an independent nonprofit testing, educational and information organization serving only the consumers. We are a comprehensive source of unbiased advice about products and services, personal finance, health, nutrition and other consumer concerns. Since 1936, our mission has been to test products, inform the public and protect consumers