The Department of Motor Vehicles (DMV) sends out nearly 33 million vehicle registration notices to Californians every year. Approximately one million of these accounts, worth an estimated $247 million, are delinquent. The state Legislature transferred responsibility for collecting overdue vehicle registration fees to us in 1993 under Revenue and Taxation Code Section 10878.
The DMV's primary responsibilities are to assist customers in driver license certification or renewal, assist in motor vehicle licensing, and oversee the annual vehicle registration in California.
The DMV does not have the administrative authority to take involuntary collection actions, such as bank or wage levies. They must file actions against debtors in small claims court. On the other hand, we have the administrative authority to take involuntary collection actions on behalf of DMV. In fiscal year 2005-2006, we handled approximately one million cases for DMV and collected nearly $135 million.
Delinquent Vehicle Registration Collections Process
It is important to note that, throughout the collection process, DMV keeps management responsibility for all accounts assigned to us. We refer all disputes about amounts owed or complaints about aspects of a case to the DMV Liaison Section or to the debtor's local DMV field office for resolution. Therefore, when registered owners disagree with the amount owed, they must call their local DMV field office.
DMV mails an annual renewal notice to the last known registered owner of a vehicle 60 days before the registration expiration date. If the vehicle owner fails to pay the renewal amount by the expiration date, DMV sends one additional notice. This notice advises the owner (now referred to as a debtor) that the account will be referred to us for collection action if the debt is not paid.
Accounts referred to us are generally 90 days delinquent. When we accept a case, we first issue a Demand for Payment Notice. If the debtor does not resolve the account within 30 days, we begin involuntary collection actions, such as bank and wage levies.
- Bank levy: Once a bank levy has been issued to a bank attaching the debtor's bank accounts, the debtor has 10 days from the notice date to pay the debt voluntarily before the bank automatically forwards the funds to us.
- Wage levy: Once a wage levy has been issued to a debtor's employer, the debtor has at least 10 days from the notice date to pay the debt voluntarily before the employer begins withholding up to 25 percent of the debtor's disposable income.
As DMV's collection agent, we forward to DMV all funds we collect. DMV then makes disbursements to various state and county agencies.
Delinquent Vehicle Registration Collections Funding
Our Vehicle Registration Collections program is funded through the Motor Vehicle Account, State Transportation Fund and the Motor Vehicle License Fee Account, Transportation Tax Fund.