LTO hikes penalties for erring car dealers, importers

Agency also warns of crackdown on operation of colorum vehicles

UNSCRUPULOUS car dealers and importers will now face stiffer penalties after Transportation Secretary Jaime Bautista approved the recommendation of the Land Transportation Office (LTO) to put more teeth in the fight against fraud, including in the registration of motor vehicles.

The agency also vowed to impose a crackdown on colorum vehicle operations nationwide.

In a statement Friday, April 12, 2024, LTO Chief Assistant Secretary Vigor Mendoza said Bautista’s approval enabled the amendment of an LTO administrative order (AO) so that erring Manufacturers, Assemblers, Importers, Rebuilders, Dealers And Other Entities (Mairdoe) that are authorized to import motor vehicles and their components will now face tougher penalties for the following acts:

(a) commission of fraud and mis representation in the filing of the application and its operations, including stock and sales reporting; and

(b) submission of fraudulent, fake or falsified stock/sales periodic reports.

The first offense will merit the suspension of the Certificate of Accreditation of up to six months and aP 500,000 fine, as well as the cancellation of the Certificate of Stock Reported (CSR), sales report and registration of the vehicle/s.

For the second offense, the offender will suffer the cancellation of its Certificate of Accreditation and blacklisting for one year from the finality of the order of cancellation, as well as the cancellation of the CSR, sales report and registration of the vehicle/s.

Mendoza said the suspension would begin upon finality of the Order/Decision and payment of the fine. During the suspension, the Mairdoe’s user log-in would be deactivated.

However, for these serious offenses, Mendoza said the penalty includes a 90-day preventive suspension to begin upon receipt of the show cause order to be issued by the LTO.

Up to P1 million

The AO amendment approved by Bautista also imposes six-figure penalties for less serious offenses, including (a) the failure to comply with the standard requirements and other laws and their implementing rules and regulations relating to the Mairdoe business operations; and (b) allowing the use of its accreditation by non-accredited persons or entities.

The penalties are P100,000 for the first offense, P500,000 for the second offense and P1 million for the third offense.

If the Mairdoe offends a fourth time, it will be penalized with the cancellation of its Certificate of Accreditation as well as blacklisting for one year from the finality of the order of cancellation.

Mendoza said this would “correct the policy before wherein erring Mairdoe can still transact with the LTO.”

He said the case of the fraudulent registration of two Bugatti Chiron, luxury sports cars, with the LTO made the agency realize that the penalties were too low.

He did not indicate how light the penalties were before the amendments were made.

After Mairdoe, the LTO will next deal with the operators of colorum vehicles.

In a separate statement, the agency announced Wednesday that it is crafting a plan to end the illegal operation of colorum vehicles nationwide that has cost legitimate transport operators 30 percent of their income.

The LTO said that to end the inter-island operation of colorum vehicles, it would coordinate with port authorities to stop such vehicles from traveling from the Visayas to Metro Manila using roll on, roll off or roro vessels. It would also intercept them at terminals and expressways.

Mendoza reminded illegal operators that the penalty for operating a colorum vehicle is up to P2 million in fines and up to six years of jail time.