How the Texas DMV plans to stop a flood of fraudulent paper plates

Fraudsters exploited a loophole in the DMV’s registration system for years. The agency says stopping the practice is its number one priority.

By Michael MarksDecember 17, 2021 9:52 am, ,

Officials of the Texas Department of Motor Vehicles are trying to close a loophole in their temporary license plate registration system that’s allowed fraudsters to illegally print and sell temporary tags.

The key changes are limiting the number of tags that a car dealership can print per year, and better vetting of business that apply to print temporary tags.

Texas Standard spoke about the changes with the agency’s executive director, Whitney Brewster,

Listen to the interview above or read the transcript below.

This transcript has been edited lightly for clarity:

Texas Standard: Before we get to the solutions to this problem, I suppose a lot of listeners want to know how these fake temporary tags have become so widespread.

Whitney Brewster: The Texas Department of Motor Vehicles board requested the Legislature to provide the department with additional authority to combat this misuse and fraud of the temporary tags. Prior to House Bill 3927, which passed this legislative session, we were specifically prohibited by statute from denying a licensed dealer access to the system – to print temporary tags. And the department’s only recourse to stop dealers that were fraudulently obtaining temp tags was license revocation through an administrative process. And that can take months or years to complete, all the while leaving the dealer with access to the temporary tag database to continue that fraudulent activity. So HB 3927, which we recommended, removed that prohibition and authorized us to deny a dealer’s access to the temporary tags database. We were also given the authority to establish the maximum number of temporary tags a dealer can obtain in a calendar year. And so establishing that maximum number of temporary tags allows a dealer to conduct legitimate business, but eliminates the ability to issue an unlimited number of temporary tags.

As you look at the things that you face – the issues, the problems that you face – where does this fit in? Is this near the bottom or is this near the top? Or where does this line up?

This is the number one priority of the agency. Fighting temp tag abuses is our number one priority, and we are trying to accelerate the implementation of House Bill 3927 as quickly as possible. We’ve gotten public comment and we’re looking to accelerate the timing of the next board meeting so that we can get HB 3927 enacted and we can start removing people from the database that are misusing it.

Do you have any sense of how much money is lost to Texas coffers as a result of this fraudulent activity?

It’s really hard to say. I know that there have been a number of figures thrown out by different law enforcement entities. I really don’t have the information on what the total amount would be. If you think about it, a registration for a standard passenger vehicle is about $70,  with additional fees that go to the local government. Those are big dollars and they add up quickly. And so yes, there is an impact monetarily. But we’re hoping that with this implementation of this bill and tightening up the licensing process on the front end, we think that we can really address what we’re seeing.

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