Texas DMV Launches Dealer License Fingerprinting Plan – NBC 5 Dallas-Fort Worth

At an emergency meeting on Thursday, the board that oversees the Texas Department of Motor Vehicles asked staff to draft new rules that would allow the department to begin fingerprinting people who apply for a car dealer license.

The move comes after a months-long NBC 5 investigation revealed how scammers were able to obtain reseller licenses, gain access to the DMV’s internal system, and then sell temporary paper tags, reaping millions in illegal profits.

Fraudulently issued tags are often created with fake names, addresses, and VIN numbers that are entered into the DMV’s system. Law enforcement officials said this effectively creates “ghost cars” that are difficult for law enforcement to track if the vehicle is involved in a crime.

At Thursday’s meeting, DMV executive director Whitney Brewster pledged to work more closely with law enforcement officials to crack down on criminal activity involving tags.

Officers with the state’s Paper Tag Enforcement Unit in Travis County have complained for years that the DMV has been slow to act to stem the tide of illegally sold tags.

A recent NBC 5 investigation showed how agents tipped off the DMV two years ago about a major security breach in the system, but that loophole wasn’t fully closed until days later. NBC 5 investigation asked the agency why they hadn’t taken more action to prevent the use of fraudulent VIN numbers to obtain tags.

Brewster acknowledged on Thursday that there was “room for improvement” in the agency’s relationship with law enforcement and said his agency was now working with Dallas and Houston police on more enforcement efforts to catch people buying and selling illegal tags.

Just last week, Dallas police conducted a day-long operation to stop vehicles with fraudulent tags in a high-crime area of ​​the city. Officers recovered stolen cars with fraudulent tags, seized weapons and arrested people suspected of involvement in other crimes. Police statewide said NBC 5 investigation that illegally sold tags have become an essential tool for criminals who want to conceal the identity of a vehicle.

A recent estimate from the Travis County Constable Precinct 3 indicated that more than 1.2 million tags were sold by dealers suspected of fraudulent tag sales in 2021 alone.

In some cases, the DMV has acknowledged that these tags are being sold by people who obtained a car dealership license using a stolen identity. On Thursday, the council instructed staff to quickly create a plan for fingerprint license applicants to try to curb this criminal activity.

Once the rules are drafted by staff, they will be posted for public comment and returned to the Board for final edits and approval.

Board member Stacey Gillman, who represents car dealerships, expressed concern Thursday about the fingerprints of franchise car dealerships, saying those dealerships are not responsible for the fraud.

A DMV advisory panel recommended excluding franchise dealers from fingerprinting rules at the time, agreeing that the problem was primarily with small dealerships and shell corporations set up to illegally sell tags.

When NBC 5 investigation first asked Brewster in December why the department was not fingerprinting dealers, she said the department believed it would need legislature approval to begin fingerprinting resellers. It was unclear Thursday how the agency determined it could move forward on its own or why the agency did not explore the possibility sooner.

The DMV board is scheduled to meet again in early February to review fingerprinting rules that will be drafted by staff.

PREVIOUS REPORTS

  • January 27, 2021 – TxDMV Takes Urgent Action to Stop Scammers Selling Paper Labels
  • January 21, 2021 – Dallas police operation targets fraudulent paper tags
  • Jan 17, 2021 – Recording shows police tipped off TxDMV about paper tag security breach years ago
  • December 16, 2021 – DMV Panel Recommends Fingerprinting Some Dealerships to Slow Paper Tag Fraud
  • December 14, 2021 – Texas House Transportation president pledges to end paper tag fraud
  • December 6, 2021 – Texas DMV boss deflects blame for paper tag debacle
  • November 23, 2021 – Illegal Paper Tags Cost Texas Taxpayers and Toll Roads Millions
  • November 10, 2021 – Suspected paper tag peddler shuts down Tuesday, reopens Wednesday: Investigators
  • November 8, 2021 – How Texas Paper Tags Became a $200 Million Criminal Enterprise: NBC 5 Investigates

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