Companies that distribute vehicle history reports use data from accident reports to provide information to dealers and buyers concerning the past history of vehicles being considered for purchase. Specifically, dealers and buyers are interested in used vehicles" history of physical damage.
The federal Driver's Privacy Protection Act was adopted to protect the privacy of personal information collected and maintained by each state's motor vehicle agency. The Act prohibits any state department of motor vehicles from disclosing personal information in connection with a motor vehicle record with certain exceptions, none of which pertain to vehicle history reporting services.
Over the years, vehicle reporting services have turned directly to municipalities to obtain accident reports. It has been a way to get information faster and a way to circumvent the state and federal laws that prevented the states from providing the data.
In a recent court decision, the U.S. Court of Appeals for the 7th Circuit ruled that the Driver's Privacy Protection Act applies to municipalities. In this case, a parking citation was placed on the windshield of an illegally parked vehicle in the Village of Palatine, Illinois. The printed citation included a date and time stamp, the officer's name and badge number, and the parking offense. It also included various information about the vehicle, including the make, model, color, year, license number and vehicle identification number. In addition, the citation included personal data, obtained by the village from a database originating with the Illinois Department of Motor Vehicles, such as full name, address, driver's license number, date of birth, sex, height and weight.
The plaintiff brought suit alleging the village's practice of printing personal information obtained from motor vehicle records on parking tickets was a violation of the DPPA. The Court found that the village's placement of protected personal information in view of the public constituted a disclosure regulated by the statute.
Under the DPPA, the Court may award:
- actual damages, but not less than liquidated damages in the amount of $2,500
- punitive damages upon proof of willful or reckless disregard of the law
- reasonable attorneys" fees and other litigation costs reasonably incurred; and
- such other preliminary and equitable relief as the court determines to be appropriate.
Prior to this ruling, municipalities were not specifically prohibited from providing the vehicle information. The DPPA only applied to states. Because this ruling found a municipal entity subject to the DPPA, the SC Municipal Insurance and Risk Financing Fund is advising its members not to provide any documents to vehicle history reporting services.
SCMIRF also advises against releasing personal information to online filing services. These services allow departments to file police reports online at no charge. Once the reports are filed, anyone can access the site and obtain a police report by paying the required fee. The reporting department receives a portion of the fee.
Enabling any party to obtain any personal information by any means may ultimately result in a liability. This applies to releasing information under the Freedom of Information Act as well. Municipalities should redact all identifying information when responding to any request.
SCMIRF, a program of the Municipal Association, provides all lines of property and casualty coverage including tort liability for its member municipalities.