Wholesale motor vehicle auctions must follow licensing and auction rules, and they may not let unauthorized people bid, take cash from the wrong person, skip required disclosures, fail to install or keep video recordings, or use no recognized damage classification system.
§794. Wholesale motor vehicle auctions; unlawful acts A. It shall be unlawful and constitute a violation of this Chapter for any wholesale motor vehicle auction to: (1) Fail to comply with the licensing requirements of this Chapter. (2) Fail to comply with any provision of this Chapter, any provision relating to the proper disposition of license tags or registrations, transfers of title, or payment of sales taxes in connection with the purchase or sale of any new or used motor vehicle, or with any rule or regulation adopted and promulgated by the commission pursuant to the authority vested in it by this Chapter. (3) Permit any person other than a licensed dealer or a person who holds a current authorization to bid for a licensed dealer, to bid, offer to bid, participate in the bid process, purchase, or offer to purchase a used motor vehicle placed up for bid at the auction. (4) Accept cash for a sale from anyone other than a licensed dealer or his agent. (5) Permit any person other than a mechanic or technical expert to accompany a licensed dealer to inspect used motor vehicles prior to the vehicle being placed up for bid at the auction. (6) Fail to disclose that a sale took place off the block or out of the auction ring by providing red-stamped verification on the auction bill of sale or invoice, with the lettering on the stamp to be no less than half-inch print size. (7) Fail to implement, within six months, following the effective date of this Section, an audio video recording system which will properly verify sales occurring in the lanes at the auction and fail to maintain those video recordings for at least thirty days following the sale. (8) Fail to use an industry-recognized damage classification system for all vehicles sold at auction. (9) Engage in fraudulent activity in the auction process. B. Any violation of this Section shall constitute grounds for suspension, revocation, or refusal to issue or renew any license or permit issued by the commission. C. Any licensee who violates any of the provisions of this Section may be subject to an injunction under R.S. 32:786 and fines and penalties provided in R.S. 32:788. Acts 2010, No. 987, §1; Acts 2013, No. 204, §1.