Michigan Secretary of State Land Moves to Protect Consumers

First unlicensed car dealer to be fined under new law

LANSING, Mich., July 23 -- Michigan Secretary of State Terri Lynn Land announced today that a Wayne County man will be the first person fined by the Department of State under a new law targeting unlicensed vehicle dealers.

"Purchasing a vehicle is a major investment for families," said Secretary of State Terri Lynn Land. "They deserve to get what they pay for. Unfortunately, there are unlicensed dealers who are making a buck at the expense of Michigan residents. Our message to these folks is simple: Get a license or get out of business."

Benjamin L. Ragsdale, 16425 Weddel St., Taylor, is being fined $5,000 for allegedly buying and selling eight vehicles between March and June. The Michigan Vehicle Code defines a dealer as anyone who buys, sells, exchanges, brokers, leases or deals in five or more vehicles within 12 months. Dealers must be licensed by the Department of State.

Public Act 652, which took effect Jan. 1, amends the law by authorizing the Department of State to impose fines of up to $5,000 for the first violation and a maximum of $7,500 for each subsequent offense occurring within seven years.

A dealer's integrity is important, especially with regard to used vehicles. Land noted, "Consumers are afforded certain legal rights when they buy from a licensed dealer."

For example, customers can file complaints against licensed dealers with the Department of State. Licensed dealers are also subject to sanctions if they violate the law and must keep records that fully document transactions.

In addition to the illegal nature of unlicensed auto dealing, Land said that there are many reasons for consumers to avoid doing business with unlicensed dealers. Buyers have virtually no recourse if they have problems with the vehicle. Some unlicensed dealers also are criminals selling vehicles with altered identification numbers, stolen parts, forged titles, or collision damage that was not properly repaired.

Land strongly emphasized that the department is not discouraging consumers from buying vehicles from "private sellers." Private sellers are individuals who are simply disposing of a vehicle that they had purchased for personal or business use.

The department originally identified Ragsdale as a possible unlicensed dealer through an internal file review. In January, an investigator visited Ragsdale's home and left a vehicle dealer application and information explaining licensing requirements. A request also was made for Ragsdale to contact the department. He did not respond.

Ragsdale continued dealing in vehicles despite a Jan. 28 warning letter from the state. Records show that he also sold 20 vehicles prior to the new law's enactment. Ragsdale appears to buy his vehicles at auctions before selling them to customers.

Ragsdale has 20 days to pay the fine. If he chooses to apply for a dealer license and the department approves it, the fine will be reduced by 50 percent.

The Department of State's Bureau of Legal and Regulatory Services has many responsibilities, including the regulation of the automotive sales industry and tracking vehicle sales to identify unlicensed dealers.

To apply for a dealer license, request a dealer kit from the department by telephone at (517) 373-9460; fax at (517) 335-2810; or by writing the Michigan Department of State, Bureau of Legal and Regulatory Services, Automotive Licensing Division, Lansing, MI 48918-1210.

To learn more about automotive dealer requirements, visit the department Web site at www.michigan.gov/sos .