Top NJ Lawmaker Proposes Major Reforms to Fight Temporary License Plate Fraud

A powerful New Jersey legislator is taking aim at the black market for temporary license plates, introducing a bill on Monday that would bring sweeping reforms to the state’s widely abused system for issuing paper tags to motorists.

The legislation from state Sen. Teresa Ruiz, a Newark Democrat and the Senate majority leader, calls for new security features on the state’s temporary tag, additional requirements for car dealers who print them and stiffer punishments for anyone selling, buying or driving with them illegally.

The proposed reforms follow a seven-month Streetsblog investigation that found widespread fraud involving so-called temp tags in New Jersey and elsewhere, with licensed used car dealers abusing weak state regulations and selling paper plates illegally to drivers using the tags to evade accountability behind the wheel. Ruiz’s bill represents the most significant effort yet to tackle the problem in New Jersey.

“Unfortunately, New Jersey has become a leading state for selling temporary license plates. This is a public safety issue as buyers are actively looking to avoid accountability,” Ruiz said in a statement. “New Jersey cannot turn away from this growing problem. Tougher regulations and fines are needed to weed out bad actors. This is a first step towards ending this practice, protecting the public and empowering the [New Jersey Motor Vehicle Commission] to take action.”

The commission regulates car dealers and temp tags in the state.

In an interview, Ruiz said she hopes the bill will pass before the current legislative session ends in January.

Dealerships can only legally issue temporary license plates when they sell or lease someone a car. But, through interviews and public records, Streetsblog found numerous dealers who sold temp tags illegally, and many more dealerships that issued vast numbers of tags with no other discernible business activity. All this was possible, Streetsblog found, because New Jersey had few controls on the official system for printing the paper plates.

Dealers could begin printing tags almost as soon as they obtained their dealership licenses. They could plug fake transaction information into the state’s online temp tag portal and print them without proof of sale. They could seemingly print the tags from anywhere — Streetsblog found one dealer who printed hundreds of New Jersey temp tags from her home computer in Queens before selling them illegally in New York. And, when dealers were caught, they faced fines that were typically minuscule compared to the vast sums to be made selling tags on the black market.

Ruiz’s bill would address each of the legal loopholes identified by Streetsblog. If approved, the legislation would:

• Mandate a redesign of the state’s temp tag template with new security features to make it harder to copy or counterfeit.
• Require dealership license applicants to submit a separate application, and take a training course, before they can begin issuing temp tags.
• Require dealers to submit proof of sale for each temp tag printed, including copies of buyers’ driver’s licenses, vehicle titles and bills of sale.
• Require dealers to provide the IP address of printers used to print tags.
• Increase the fines that the Motor Vehicle Commission can impose on dealers caught fraudulently issuing temp tags to $2,500 for a first offense and $5,000 for each subsequent offense.
• Treat each fraudulently issued temp tag as a separate violation.
• Empower the Motor Vehicle Commission to ban dealers caught selling tags from ever working at another New Jersey dealership.
• Make it a crime to sell, drive with, or even possess an illegal temp tag, including both real tags issued fraudulently and counterfeit tags. Penalties for those offenses would range from 30 days imprisonment or a $500 fine to 18 months imprisonment or a $10,000 fine.

The Senate Transportation Committee voted to advance the bill on Monday.

At that meeting, Jim Appleton, president of New Jersey Coalition of Automotive Retailers, said the group supported the effort to root out temp tag fraud but opposed the bill as written, arguing that it would create new hurdles for law-abiding car dealers.

“I think everybody recognizes this is a problem that they have to address,” Appleton said in an interview. But “you don’t want to punish or burden the legitimate players.”

The Motor Vehicle Commission did not respond to a request for comment. Ruiz said the commission was involved in developing her bill.

The agency is in the midst of its own regulatory overhaul related to temp tag fraud, proposing new rules over the summer that industry observers say could shut down some of the warehouse-like facilities where dozens of dealers have been caught violating temp tag regulations. The new regulations have not yet been adopted.

Georgia is also a major source of fraudulent temp tags in New York City, Streetsblog’s investigation found. A lawmaker there said in April that he planned to introduce legislation on the issue next year.

Also in April, New York City Council Member Oswald Feliz (D-Bronx) introduced two bills on temp tag fraud, which are pending.