Vermont Legislature SmartTranscripts:

[Sen. Rebecca "Becca" White (Vice Chair)]: You're live.

[Sen. Richard "Richie" Westman (Chair)]: So we're back live, Senate Transportation, and we have a bill on our wall, S two thirty five, and I introduced the bill. The constituent of mine that had an issue with this is going to speak and tee up the issue and let us know about the problem and talk about the solution. Julia, are you there?

[Julia [last name unknown], constituent witness (attorney, Morristown)]: I'm here, can you hear me?

[Sen. Richard "Richie" Westman (Chair)]: Yep, we can hear you.

[Julia [last name unknown], constituent witness (attorney, Morristown)]: Okay, great, thank you.

[Sen. Richard "Richie" Westman (Chair)]: Why don't you give us a little history?

[Julia [last name unknown], constituent witness (attorney, Morristown)]: Thank you. Thank you so much for having me. I appreciate the time. I realize how busy you are. Thank you to Richie for bringing this to your attention. So has the committee been able to see the materials that I sent ahead of today? Okay. So I'm an attorney in the Morristown area, and I experienced what was described in the affidavit of my small claims action. And that was that I consider myself a savvy consumer, and I did my due diligence. And I purchased a vehicle and relying on a CARFAX car history report from dealer maintained vehicle for its entirety. And I experienced a catastrophic failure of the power steering system on Interstate 89 and at 70 miles an hour in construction traffic. And I could have died. I could have killed someone else. And I fortunately avoided mishap and it turned into a $12,000 repair because the complete power steering system failed. In the course of having that repair work done, the technician slipped and revealed that the internal service records between the dealerships revealed that the car had a previous catastrophic power steering system failure at 31,000 miles before I bought it. And that the service tech was not supposed to reveal that information to me. He could lose his job for doing so. That what is reported in the CARFAX report or any other vehicle history reports is not reflective of the true condition of the vehicle. So as an attorney, I could easily bring this through a civil action. And I did, I am. But it struck me that the average consumer can't likely do that. And when I started looking into it, I learned more and more disturbing information. So it wasn't enough for me to get a $12,000 settlement. Protection issue. This is an issue where you or one of your loved ones may be in the same position I'm in and they may be hurt or they may die in a car accident as a result of misrepresentation. My husband and I are antique car collectors. We host automobile car shows around the area. We're active participants in a number of car clubs. And when I spoke with people, this is a widespread issue. Everybody who heard about my situation either had a similar instance themselves or knew a friend or family member. So it's not just me coming to the committee and hoping that I can get personal justice. It's a bigger consumer protection issue. In reaching out to Dan Noyes, he shared that his neighbor had a Saab brand new from a dealer and had multiple, multiple repeat problems with electrical systems and mishaps. It was repeatedly taken back to the dealership. It was going to go to Lemon Law and the technician let it slip that the car fell off the transport vehicle on the way to the dealership. And the technician wasn't supposed to let that slip and reveal that, but that's actually what happened to that car. And the CARFAX and other vehicle history reports start from the time that the car leaves the manufacturer to the dealer. And nothing in the report mentions anything about the car falling off the transport truck having to have massive front end repairs. He bought the car at fair market value just as I did. So the vehicle history report system in The US is a relationship, a profitable relationship between the dealers and CARFAX. The dealers subscribe to CARFAX. CARFAX is making money off of them. And in turn, the dealers benefit from CARFAX promoting the vehicle as being in the condition that it's in. In my case, the records in the report say system checked, system checked. There's nothing about catastrophic failure, replace system under warranty. They're putting people's lives at risk because there is no reliability, no transparency. They're actually fostering an ability of the dealers and the repair shops to hide the true condition of the vehicle. The State of California has adopted the CARS rule. I shared that as an exhibit for you. The FTC rule that I shared with you, the number one criteria in the FTC rule is that no deceptive practices with regard to the true mechanical condition of the vehicle. So my effort here is that we can't have dealers profiting from misrepresenting the condition of the vehicle and you're paying for something that's worth less than it is because it really has these unknown unrevealed conditions. We can't have CARFAX profiting off of the subscription service that the dealers engage in with them for pay or people like myself pay $50 for a CARFAX report only to find out that they're part of the problem. They're not revealing the true condition of the vehicle. What's even more disturbing is that the federal FTC rules for consumer protection in used and new car dealers actually suggest that the consumer needs to be encouraged to seek on their own vehicle history reports and making an informed decision about the car and their purchase. That's exactly what I did only to learn that there's this back room relationship between the dealers and CARFAX and the true condition of the vehicles not being disclosed. And in my case, I could have lost my life. I could have killed somebody else and any other consumer out there. So it wasn't enough for me to get settlement in the court system. This needed to go further because, as I said, I'm not the isolated incident here. Everywhere I turn, I'm hearing people's similar horror stories. And I would be happy to compile statistics or information within Vermont of the victims like myself. And I've talked to the car supply stores, the repair shops, the dealers in my area, every single one of them has been in support of saying, yes, there needs to be legislation because here's what can happen on the in and out. My body shop guy told me how a body shop can acquire a title to a vehicle that should be a salvage title, but because they buy it and they turn around and restore it, now it's no longer a salvage title. And who knows what the integrity of that vehicle is when it goes out into the stream of commerce. So thank you for your time. Know you're busy. I know transportation has a huge budget issue this year. This may seem like small potatoes, but honestly, I could have died. I could have killed somebody else. And when I learned that this was covered up through the internal records between the dealerships and not revealed, I actually was having the tech come to testify in court. And I had to ask the court to allow his comments under a hearsay exception because he was in fear of losing his job when I subpoenaed him and he would have to appear. That's the system that exists that consumers have no knowledge of and are at risk because of it.

[Sen. Wendy Harrison (Clerk)]: Questions? So it seems like the solution is what California did, that's what you're suggesting.

[Julia [last name unknown], constituent witness (attorney, Morristown)]: That is what I'm suggesting. It's not overly burdensome. It's not intrusive or invasive. I'm sure the automotive association is not going to be in favor of this. All I'm asking in Vermont is that the repair facilities and the dealerships have to disclose diagnostics in addition to system checked. They need to reveal the true diagnostics of what it was that that car encountered so that I never would have purchased the vehicle if it had said, oh, at 31,000 miles, it had a complete failure of the power steering system. I wouldn't have bought it. I wouldn't have dared to drive it. And the reason I didn't repair it, spend the money to repair it and keep the vehicle and then trade it in the future is I didn't know if it would happen a third time risking my life. And I in good conscience couldn't sell the vehicle, pass it off to someone else knowing that it could fail again and someone could be harmed. So it's not, my hope isn't, I'm not a fan of the heavy legislative burdens. It's that a simple requirement following the California cars model that diagnostic information has to be included in any vehicle history reporting. They can elect not to partner with a vehicle history service. That's fine. That in itself is a message to the consumers. But if they do partner with a vehicle history service reporting agency, it needs to be transparent and actual, factual. So the diagnostics needs to be in there.

[Sen. Richard "Richie" Westman (Chair)]: Senator White has a question.

[Sen. Rebecca "Becca" White (Vice Chair)]: Thank you, Julia so much for coming and presenting your situation and I'm very sorry to hear that this has played out for you in a in this way. That's extremely frustrating and also sounds like if you had had proper information, you may have made a different purchasing decision. So it's also your safety, but being an informed consumer. So I'm actually really grateful that senator Westman brought this bill forward to me and forward to our committee. I guess what's confounding with this is I thought they I thought they had to do this already. Like, this just surprises me that they I thought that federal law that said, you can't lie or disregard information related to the vehicle. That's that foundational trust I had in CARFAX as an entity because I thought we didn't allow that. So I guess what confuses me is if you could give us a landscape of, you know, what we have currently. And then I looked at the bill that as introduced by senator Westman, and I had just a quest I had a few minor changes to the vehicle history information section and how we refer to things like accident versus crash. Just some, I would say, changes like that. But overall, I'm very supportive of this. And I'm wondering if you could illustrate why it's not already covered under federal law.

[Julia [last name unknown], constituent witness (attorney, Morristown)]: Thank you. Thank you so much for bringing that up because I too assumed, right? We all assume we can trust. And then in the legwork that I've done in trying to understand this and understand if it was a one off thing or if it's a broader problem is that the rules, I'm sure it was heavily lobbied at the national level, the FTC level, at the federal CARS level. The rules have been massaged or tweaked in a way that all CARFAX legally has to make sure they disclose as whether the car has been in an accident. That's what it sugared off to. So despite the fact that the FTC regulations say there shall be no deceptive reporting about the vehicle condition, The vehicle history reporters are only on the hook if they don't disclose that the car was in an accident. And I couldn't see to what degree that got defined. The other piece of the puzzle is the salvage, the loophole and the salvage title rules, which again, I'm not an expert in this area of law whatsoever, but my tried and true auto body repairman who worked for a big dealership in Burlington shared with me that something that would salvage title can be manipulated through the system in Vermont DMV processes so that someone buying something as salvage who's in the automobile restoration business can turn around and have a title that's free of any salvage tag on it. So maybe that's not concerning if they are reputable restorers. Maybe the DMV felt that way. But you're absolutely right. At the FTC basic level, the regulations should be in place. When it comes to vehicle history reporting services, they found a loophole to say, all we have to disclose is the mandatory disclosure that we have to be absolutely certain of is whether it's been in an accident. And then beyond that, they can be as vague or there's a mutual benefit between the vehicle history report, car facts and the dealerships. They mutually benefit from each other.

[Sen. Wendy Harrison (Clerk)]: The title should be here from DMV that the salvage title does fall through as a rebuilt title. So a car that was totaled should still say that it was rebuilt, but I asked for some examples. In fact my daughter just bought a salvage car, I'm going to go after her to look at her title and see what it says.

[Sen. Richard "Richie" Westman (Chair)]: Well and will ask questions at DMV on this.

[Julia [last name unknown], constituent witness (attorney, Morristown)]: Thank you, I appreciate that and again I'm not an expert in this area of law by any means.

[Sen. Richard "Richie" Westman (Chair)]: We've got about five minutes more.

[Sen. Rebecca "Becca" White (Vice Chair)]: No, I'm just I echo what Senator Windham said and thank you so much for bringing this to our, to our attention and it's, it's awful. Mean, it's, it's unconscionable. And, more and more people are buying, used cars just because it's, they're less expensive generally and they can last a long time but it's critical to have that information and I'm glad you were okay. Thank you. I'm glad I appreciate your persistence and we we need to do something about it, Patricia.

[Julia [last name unknown], constituent witness (attorney, Morristown)]: I thank you so much. I've always felt like our legislature is very accessible. I appreciate it so much and I don't want to sound like this isn't about me. This isn't about my case. It's not about my $12,000 It's about the bigger picture of this is terrifying. And no one should have to go through this and we shouldn't be at the mercy, at the risk of dealers and CARFAX and other history reporters who are profiting from misinformation.

[Sen. Richard "Richie" Westman (Chair)]: Right, right.

[Sen. Rebecca "Becca" White (Vice Chair)]: Thank you very much

[Sen. Richard "Richie" Westman (Chair)]: for doing this.

[Julia [last name unknown], constituent witness (attorney, Morristown)]: And I'm happy, Richie, if you need additional, if you want additional information from the CAR groups we're involved with and others experience, just let me know.

[Sen. Richard "Richie" Westman (Chair)]: So at this point, I'm gonna have to cut out, but here's what I'm going to say to you. We will have a discussion around this table if there's interest in this, and our first place will be to talk to DMV, and if there is more interest around the table, we will get back to you.

[Julia [last name unknown], constituent witness (attorney, Morristown)]: Okay, thank you all so much for your time.

[Sen. Richard "Richie" Westman (Chair)]: Thank you very Thank much, you.

[Julia [last name unknown], constituent witness (attorney, Morristown)]: Bye Great

[Sen. Richard "Richie" Westman (Chair)]: to see you.

[Julia [last name unknown], constituent witness (attorney, Morristown)]: Good to see you.

[Sen. Richard "Richie" Westman (Chair)]: Thank you. Can you take this offline? Have conference committee. It shouldn't be more than ten or fifteen minutes.

[Sen. Rebecca "Becca" White (Vice Chair)]: If Autistic.

[Sen. Richard "Richie" Westman (Chair)]: Why don't we can you see if And you'll come back with Yeah. We'll come back. So can we see if Martine would be free at like, is fifteen minutes enough?

[Sen. Rebecca "Becca" White (Vice Chair)]: So

[Sen. Richard "Richie" Westman (Chair)]: 11:15 if No, we can

[Sen. Rebecca "Becca" White (Vice Chair)]: that is not 11:15. It would be 10:45. And fifteen minutes would be No. No. I need He wants fifteen.

[Sen. Richard "Richie" Westman (Chair)]: I wanna be back at 11:15 Thank you

[Sen. Rebecca "Becca" White (Vice Chair)]: for clarifying.

[Sen. Richard "Richie" Westman (Chair)]: For of to be up on the floor at 11:30. It like, if Martin could be there, I'm gonna go to the conference committee on the budget adjustment and