Tire Registration Fines Could Devastate Your Business
We all do our best to avoid them, but sometimes mistakes happen. And sometimes the penalty for making a mistake is disproportionate to the offense that has been committed.
Take the registration of passenger and light truck tires. You probably know that you can be fined for registering consumer tires improperly at the point of sale.
But do you know that you can be fined up to $22,723 for a single violation? And are you aware that you can be fined an even larger amount — a whopping $113.6 million — for a related series of violations?
Now, I realize that no MTD reader would improperly register tires on purpose. But imagine being hit with one of the draconian fines listed above or even a fraction thereof — all for making an honest-to-goodness mistake.
It could happen.
On Jan. 11, the U.S. Department of Transportation posted a notice in the Federal Register that increased fine amounts for tire registration violations. Up until recently, the maximum penalty for a single violation was $22,329. The top fine for a related series of violations was a “mere” $111.6 million.
I use the word “mere” facetiously, but the totals we’re talking about are no laughing matter.
A fine of up to either maximum could have a devastating impact on your business — as could a fine totaling a smaller percentage of those amounts.
Fines for registering tires improperly “have always been tied to civil penalty amounts under the Occupational Safety and Health Act,” says Roy Littlefield, CEO of the Tire Industry Association (TIA). The act passed 50 years ago.
TIA’s predecessor, the National Tire Dealers and Retreaders Association, began noticing an uptick in fines during the 1980s.
“At the time, it was up to $1,000 per violation. The fines were prohibitive then and they have continued to go up. Since this all went into effect, it has been a very emotional issue for tire dealers. And I don’t think it was ever handled correctly.
“But the way things work is once it’s published in the Federal Register, it’s law,” says Littlefield.
Where do we go from here? TIA is working on a more reasonable solution.
The association is proposing that for “unintentional violations,” the federal government should create a structure of written warnings, followed by what Littlefield calls “narrowly escalating fines. After two written warnings without any penalties, third and fourth violations would (earn) penalties of $500 and fifth or sixth violations would be $1,000.”
That sounds a lot more acceptable than what’s now on the books.
And by pinning down specific penalty amounts, TIA’s proposal would create more predictability.
Right now, “it’s very subjective on who they fine and how much because the caps are incredibly high,” says Littlefield.
By the way, commercial truck tire dealers have a horse in this race, too. They can be fined for improperly registering medium truck tires, which “end up on fleets” that travel “all over the country.
“If there’s a recall, it’s hard to track down some of these tires, so that’s going to have to be worked out.”
Education is another step. Some smaller tire retailers might not be aware that they can be penalized, says Littlefield.
“I think we could have a program to reach out to these people. We could get a lot of information out there” to ensure they understand the consequences of improperly registered tires.
This would lead to an increase in the total number of tires registered — also a good thing.
“There are a lot of ways we can go about this. And they would all be positive to help the situation and get away from those burdensome fines that can put tire dealers out of business. I think right now, the first thing dealers should do is acquaint themselves with the law.”
Then make your voice heard. Contact your elected representatives. Let them know that current fine amounts for accidental tire mis-registration are heavy-handed.
Deterring reckless behavior is one thing. Potentially crippling small businesses that are acting in good faith is another.
There has to be a better way. I think TIA’s proposal is a great start. But we, as an overall industry, must join the fight for an equitable alternative. It will take a group effort.