DMV lookalike 'NeedTags' threatens elderly customer with legal action for credit card dispute

RICHMOND, Calif. (KGO) -- The DMV just announced it is cutting many in-person services and offering more services online only.

But now several viewers tell 7 On Your Side they clicked on a link they thought was the Department of Motor Vehicles; instead, it was a third-party company that unexpectedly tacks on extra fees. It was especially upsetting for an elderly East Bay man who disputed the fees on his credit card -- and the company threatened to prosecute him for fraud.

81-year-old Allan Jensen of Richmond just wanted to renew his car registration. The simple task was anything but.

Jensen wound up buried in paperwork and facing legal threats.

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"I don't want to go to court. I'm not a criminal," Jensen said. "I trust the state of California... It's not about the money."

His ordeal began when he went online to register his two vehicles.

"I Googled 'California Department of Motor Vehicles,'" Jensen said.

The top search result said "DMV registration renewal." Jensen assumed it was the DMV.

"Right there, that's what I clicked on," said Jensen, pointing to the link on the screen.

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The website showed in large type, saying, "California vehicle registration renewal."

So Jensen followed the prompts. He didn't notice a disclaimer in fine print at the top. This site did not belong to the DMV. It was a third-party company that charges extra fees for DMV services.

And so, Jensen was surprised when he saw the bill.

"Geez, they charged me a whole lot of extra money for doing this, I never experienced before," Jensen said.

Jensen still thought it was the DMV. So he paid $956 for two cars.

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Later, he received tags for one car, but not the other. Instead, he got an email saying that car needed a smog check -- but he knew it did not. So he called the number he found on the notice..

"'We're not going to send you the tags until you've had this car smogged,'" Jensen said he was told. "I said, 'Well no, I don't need to smog my car'... And they weren't very nice to me. I said, 'Are you a DMV employee?' They said no."

Jensen finally realized he was never on the DMV website. It was "NeedTags.com," and it had just charged him $150 in extra fees, including a "service fee,'' delivery fee and $31 for paying by credit card, plus the smog check the DMV said he didn't need.

"I finally got really mad, to tell you the truth," Jensen said.

Now, his registration was about to expire. So Jensen drove to a DMV office, paid the fees in person, and got his tags on the spot -- no smog needed.

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But now, he'd paid twice to register that car.

"I thought I'd been taken to the cleaners," Jensen said.

Jensen disputed the charges with his credit card. That's when NeedTags came after him.

NeedTags said Jensen was under investigation for fraud and theft. An email said: "This is your final notice. Any chargeback will be prosecuted to the full extent of the law. We will report chargebacks to the appropriate legal authorities."

And: "You may be subject to court costs, legal fees and bank liens."

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It shook him to the core.

"I'm not a criminal. I've never been to jail," Jensen said.

NeedTags sent 30 pages of documents to Jensen's credit card company, saying chargebacks are considered theft, even though they're not illegal, and instead are among the rights afforded to credit card users.

"They're trying to make me feel like a criminal, you know, doing my DMV stuff," Jensen said.

As he showed 7 On Your Side mounds of paperwork, Jensen broke down in tears -- how did a simple car registration come to this?

"I knew I probably couldn't get an attorney. It would cost me more money," Jensen said through tears.

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7 On Your Side found dozens of complaints online about NeedTags, many saying the company led them to believe it was the DMV, then surprised them with extra fees. Some posts also complained NeedTags threatened charges of civil fraud and theft for disputing the fees. Others said they paid fees and never got their tags or other paperwork.

And yet, it turns out NeedTags is an official third-party partner of the California DMV, a delegated provider of DMV services, operating under auspices of the state of California.

NeedTags owner Eddy Asmerian did not want to go on camera. But by phone he told us the company is fully transparent about not being the DMV, and discloses fees before payment. He denied that the Google ad is intended to draw consumers away from the free DMV website, even though it uses wording in large type saying "DMV Vehicle Registration Renewal." But he said he will consider increasing the size of the disclaimer on the website.

As for threatening Jensen, he said legal action is justified because the company had already paid his fees to the DMV -- at least some of them. He said if Jensen didn't want to get a smog check, he should have requested a cancelation of his registration order for that vehicle.

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However, when 7 On Your Side asked the DMV about NeedTags complaints, the DMV took action, saying in part: "The DMV does not condone misleading or aggressive marketing strategies that might cause customers to believe they are interacting with the DMV. Furthermore, we do not support any aggressive behavior or threats made by these third-party services."

The DMV contacted NeedTags about Jensen's case. After that, NeedTags refunded Allen $518 for that duplicate payment.

A huge relief.

"I went from so low to... I am sky high now,'' Jensen told 7 On Your Side. "When I saw that it just felt so good... I knew that you had waved your magic wand."

The DMV is urging customers to avoid third-party companies that charge extra fees, even if they are partners. The DMV offers services for free -- other than a credit card fee of just under 2%. To be sure you're on an official DMV website, the web address should end in "dmv.ca.gov" -- nothing else. NeedTags and other companies have purchased Google ads, so they often appear at the top of search results. Be careful what you click.

Here is the full DMV statement.
The DMV's business partners automation (BPA) program encompasses over 6,600 approved external entities authorized to process vehicle registration transactions remotely. However, it is important to note that business partner websites are not directly overseen by the DMV. Registration services operate as independent online businesses and are responsible for the development and management of their websites without direct DMV approval.

The DMV does not condone misleading or aggressive marketing strategies that might cause customers to believe they are interacting with the DMV itself. Furthermore, we do not support any aggressive behavior or threats made by these third-party services. We consistently emphasize the importance of transparent communication regarding fees and services to all our registration service partners.

To ensure compliance and protect consumers, the DMV actively collaborates with our BPA partners to address and correct any misleading language on their websites. It is critical that these services do not misrepresent themselves as the DMV. BPA's are required to adhere strictly to the following provisions of the California vehicle code:

California vehicle code 11406(d) and (e):

(d) every registration service shall prominently display at its place of business a sign indicating that the service is not a branch of the department and shall inform each customer of that fact.
(e) every registration service shall provide a disclosure to each customer that the services described in section 11400 may be provided by the department without an additional fee. if a registration service is providing a service described in section 11400 in person, the disclosure required pursuant to this subdivision shall be in writing. if a registration service is providing a service described in section 11400 on an internet web site, the disclosure required pursuant to this subdivision shall be in a conspicuous place on the internet web site.

The DMV remains committed to ensuring that all our partners uphold these standards to maintain the trust and confidence of the public. Should you have any further questions or require additional information, please do not hesitate to contact us.

The DMV encourages customers to use its online services and other service channels to complete transactions, including eligible driver's license and vehicle registration renewals. Customers can also use the service advisor on the DMV website to learn their options to complete DMV tasks. The DMV recommends all Californians doing online business to look for DMV.ca.gov in the web address before completing the transaction to ensure they are on the official DMV website."

Take a look at more stories and videos by 7 On Your Side.

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