
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, November 24, 1995                   TAG: 9511240063
SECTION: VIRGINIA                    PAGE: B-3   EDITION: METRO 
SOURCE: Associated Press|
DATELINE: RICHMOND                                LENGTH: Medium

DMV WANTS END TO ON-LINE FEES

The Department of Motor Vehicles is sending a letter to car dealers telling them they can't charge customers a fee for electronically processing DMV paperwork while taking a rebate for providing the service.

The DMV is responding to a request by Jean Ann Fox, president of the Virginia Citizens Consumer Council, that Attorney General Jim Gilmore investigate the practice.

DMV Commissioner Richard Holcomb told the state's Motor Vehicle Dealer Board on Tuesday that he is sending the letter to the more than 200 dealers in Virginia who use on-line access to process cars' tags and registration.

Fox said on-line dealer contracts prohibit charging consumers for filling out DMV applications or other services related to DMV transactions.

Holcomb's letter, which he made available to the Richmond Times-Dispatch, concurs with Fox on this point. ``A processing fee may be charged, provided it is to cover consumer services other than those which relate to DMV,'' the letter said.

Holcomb advises dealers to make this point clear to their sales staffs. ``Telling customers whose transactions will be completed on-line that the processing fee is for `DMV work' violates the contract you have with DMV,'' the letter said.

Despite the rebates they get from DMV, on-line dealers say they lose money by electronically processing registrations, because the service requires the purchase of equipment and payments to a third-party vendor.

Dealers offer the service primarily for customer convenience, said Don Hall, vice president of the Virginia Automobile Dealers Association.

Processing fees charged by some Virginia dealers range from $99 to $245. Hall said about 10 percent of the work to process a financed car sale involves DMV-related services. ``The other nine-tenths goes for consumer-related services like getting payoffs on trade-in cars,'' he said.

In an effort to put controversy to rest, the board agreed to urge dealers and car salespeople to educate the public on processing fees.

Fox characterized the action and Holcomb's letter as ``a partial response, but not a real solution.''

by CNB