Dealer Regulation Process
The Department of State is responsible for licensing and regulating vehicle
dealers, repair facilities, and mechanics. The following methods are utilized by
the Department to regulate vehicle dealers and assure that they adhere to the
requirements of Chapter II of the Michigan Vehicle Code and administrative
Section 257.250 of the Michigan Vehicle Code authorizes the Michigan
Department of State to conduct investigations and gather evidence against
persons who may have violated, or are about to violate, the Michigan Vehicle
Code or an administrative rule. Complaints filed by consumers are routinely
handled by an investigator of the Department.
The Department's Regulatory Monitoring Division receives thousands of
consumer complaints every year. The Division attempts to gather all of the facts
in these cases. Dealers can always provide critical information to the Division
to assist in the investigation. When consumer complaints are filed, the Division
will contact the dealer in one or more of the following ways:
- Mail. The Division will send the dealer a letter asking for a
response to the consumer complaint. The dealer's side of the dispute is very
important in resolving the problem. Providing the Division with a written
response will help assure the dispute is handled as quickly and fairly as
- Telephone Contact. A Department investigator may telephone the
dealer to discuss the consumer complaint. It is very important that the
dealer's side of the dispute be given. Providing the Division with
forthright answers and copies of transaction records will assist in a proper
resolution of the complaint.
- Personal Contact. Sometimes in-person visits to dealerships are
necessary to investigate complaints. Department investigators will properly
identify themselves when contacting the facility. Section 257.251(7) permits
the Department investigators and other law enforcement officers to inspect
dealers. All records pertaining to sales transactions performed within the
past five years must be available for inspection.
Timely and Favorable Responses
When a dealer is contacted by the Regulatory Monitoring Division, a timely
response will help ensure that the complaint is handled quickly. Delays in
answering letters or telephone calls will only prolong the investigation. Also,
failing to cooperate with a Department investigator can result in action being
taken against the dealer. Here are some helpful hints:
- Reply promptly. This may avoid the need for further follow-up;
- Include copies of all relevant paperwork with your response;
- When responding to a letter, reply in writing. A written response may
avoid the need for further contacts.
When Violations are Alleged
In the course of an investigation or an inspection, the Department
investigator may determine that the dealership failed to meet the requirements
of the Michigan Vehicle Code. The investigator may find it necessary to issue a
Notice of Noncompliance (NNC) which is similar to a "ticket." By issuing a NNC,
the Department investigator believes there was enough evidence to justify
issuing an alleged violation. Of course, the cited dealer can appeal the NNC to
higher levels in the Department. The appeal must be made in writing and must
include the reason the dealer believes the violation was inappropriately issued.
Supporting documents must be attached. Appeals are sent to: Michigan Department
of State, Business Licensing and Regulation Division, Lansing, MI 48918.
When a NNC has been issued; it is the responsibility of the Business
Licensing and Regulation Division to determine what disciplinary action, if any,
should be taken against the dealer.
- Depending on the seriousness of the alleged violations, the past record
of the dealer, and the action taken to satisfactorily resolve the matter,
disciplinary action may range from a warning letter to suspension or
revocation of the dealer license.
- Typically, before action is taken to suspend or revoke a license, the
dealer or agent is given an informal opportunity to meet with Department
representatives to discuss the matter and, hopefully, reach an agreeable
- Only in the most serious cases, or when an agreeable conclusion cannot
be reached, is an administrative hearing held to determine whether it is
appropriate to suspend or revoke the license of a dealer or salvage vehicle
Violations issued to a dealer or agent by the Business Licensing and Re
Related Documents> Consumer's Automotive Information and Complaint Kit - 443745 bytes
Section 257.251 of the Michigan Vehicle Code states each dealer record and
inventory shall be open to inspection by a police officer or an authorized
officer or investigator of the secretary of state during reasonable or
established business hours.