Florida's Success With Shop Licensing

Introduction

Before 1993, the only way to resolve an automotive service issue in Florida was in the court system. The average time to resolve a case was two and a half to three years. The inefficiency of the system was not good for the consumer or for the shop owner.

In 1990, the former ASA-Florida affiliate introduced legislation to provide a much better system designed to protect consumers and shop owners alike as well as resolve issues expeditiously. The legislation was introduced each year until it passed in 1993. It provides a method to help eliminate fraudulent activity in the automotive service industry in Florida.

What was key to the successful passage of this legislation was that the automotive service industry and the state government worked together. That effort continues through an advisory board that oversees the activity of the Bureau of Auto Repair. This board is made up of nine industry members (mostly ASA members) and two consumer members. This process has worked well and has enabled the reduction in the number of auto service complaints by more than 50 percent in the past 12 years. The impact is actually much greater when you consider that the number of vehicles and drivers has increased tremendously in those 12 years.
- Charles Elder, AAM
Ray Gordon Brake Service, Tallahassee, Fla.

Auto repair fraud was at one time the No. 1 complaint filed with the Florida Department of Agriculture and Consumer Services. This past year, it ranked fourth. The drop in complaints is due in part to Florida's tough Motor Vehicle Repair Act. The act requires that motor repair shops engaging in the business of motor vehicle repairs register biennially with the Department of Agriculture and Consumer Services. The act applies to dealers of new and used cars, trucks and motorcycles, repair facilities and service stations, self-employed persons, truck stops and paint, body, brake, muffler, transmission, mobile repair and glass shops. The law does not apply to persons or companies repairing their own vehicles or vehicle repair that is used for agricultural or horticultural purposes.

Citizens know where they can turn when they have a problem. Auto repair shops have been put on notice that the department can and will take action when consumers are not given a fair deal. The law protects consumers but it also protects legitimate repair shops that may be undercut by businesses that don't follow the rules.

The Motor Vehicle Repair Act went into effect July 1, 1993. The first four years saw a 25 percent drop in complaints about repair rip-offs. Intense investigations and compliance monitoring have enabled that trend to continue. The act requires all auto repair shops to register with the department's division of consumer services and pay a registration fee, which is based on the number of employees. Florida's registration fees are:

The law stipulates that if work is expected to cost more than $100, a written estimate should be provided to the consumer. The shop must also get a customer's approval before exceeding the estimate by $10 or 10 percent, whichever is greater. This prevents any hidden charges when customers pick up their vehicles. If a consumer decides to cancel repairs that exceed the estimate, the shop must reassemble the car and can charge for reassembly only if the consumer was told of the potential charges in advance of the written estimate. Customers can also ask for old parts to be returned to them, unless the parts are still under manufacturer warranty.

Consumers must be proactive about taking a close look at their repair estimate form. Florida law requires repair shops to include, among other things, the date and time of the estimate, odometer reading, description of the problem, labor, parts and other merchandise costs. If parts were used in the repair, a shop must also guarantee whether they were new, used or rebuilt.

Consumers in Florida can call the department's hotline to check on the registration of a repair shop before they take their vehicle in for any work. In addition, they can obtain information on the complaint history of a repair shop and make educated decisions about the reliability of a repair shop.

If a business is found in violation of the act, the department's Bureau of Mediation and Enforcement investigates complaints and can levy fines of up to $1,000 per violation. It can also order the business to cease and desist from further violations of the law. Complaints are normally processed within 90 days of receipt. Unregulated complaints are informally mediated. Complaints against businesses regulated by the department are escalated to the investigations section if there is no response to the complaint.

The department does much more than react to complaints. It also monitors compliance with the act through on-site inspections, verifying that the proper forms are being used and the required information is being provided to consumers. During 2003-2004, the department conducted 3,481 on-site investigations.

Since its passage, the Motor Vehicle Repair Act has evolved to become easier to use. In July 2003, the department switched from annual to biennial registrations, thereby reducing the paperwork load for the industry and cutting the application processing time to within one week of receipt. Repair shops that follow the rules should be on a level playing field with their competitors. Those who try and circumvent the rules, or go so far as to defraud a customer, will face fines or have their doors closed permanently.

During 2003-2004, the department registered 21,550 motor vehicle repair shops and conducted more than 3,481 on-site investigations. It processed 2,227 written complaints and refunded more than $263,812 to consumers and posted $130,752 in administrative fines. In the state of Florida, the money collected for fines and registration fees goes into a general inspection trust fund. The state legislature determines the appropriations of the fund, which typically go toward paying for the operating costs involved with administering the Motor Vehicle Repair Act.

Once a business has met all of the shop licensing registration requirements, the Florida Department of Agriculture and Consumer Services will issue a registration certificate to applicants for every place of business they own. The certificate shows the name and address of the motor vehicle repair shop and the registration number. In the case of a mobile motor vehicle repair shop, the certificate will show the home address of the owner, if different from the business address.

The department also provides an 11-inch by 17-inch sign with 30-point type to each registrant. The registration certificate should be attached to the sign by the registrant in the designated area and conspicuously posted at the customer service area in full view of the motor vehicle repair shop's customers.

Any change in ownership requires a new registration application by the new owner. The Motor Vehicle Repair Act does not allow for the transfer of registration from one business owner to another.
- J.K.

Editor's Note: ASA's stance on shop licensing maintains that states are free to choose whether or not they want to pursue the issue at the state level. Shop licensing has become less divisive in recent years, due to better education of the issues by ASA and other groups.

J.R. Kelly, director of the division of consumer services of the Florida Department of Agriculture and Consumer Services, reviews Florida's experience with shop licensing since 1993. Charles Elder, secretary/treasurer of ASA's board of directors, not only helped write Florida's legislation, he helped get it passed. Elder currently serves on Florida's advisory board on shop licensing.