Drivers angry DMV 'lookalikes' charge extra fees to register cars, and DMV gets a cut

SANTA CRUZ, Calif. (KGO) -- Hundreds of California drivers believe they were misled into paying extra fees on websites they thought were the DMV.

After our previous 7 On Your Side reports on consumer complaints, some lawmakers tried to limit those fees. But those efforts failed in the state Legislature.

7 On Your Side has tracked hundreds of complaints about one company in particular -- NeedTags.com.

The company was buying Google ads that took it to the top of Google search results seeking DMV car registration.

It has led many to believe NeedTags was the real DMV.

" I didn't read the fine print," said Manuella Raquelle of Santa Cruz, who thought she was renewing her registration on the DMV website. "I got taken in somehow and ended up paying $90 more than I needed to."

She actually landed on NeedTags.com, a third party website that is authorized by the DMV to sell DMV services as a so-called "delgated provider." And like other DMV partners, NeedTags can tack on as unlimited extra fees.

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

Raquelle owed the DMV $612 to register her car. But NeedTags charged $702 -- adding $90 in extra fees.

Leen Alleart of Corte Madera made the same mistake and was hit with $90 in added fees. "And it's like fee after fee after fee," she said, rattling off the charges. "There was a service fee of $49 a $7 BPA fee, a super high fee for paying by credit card, $25, plus $7 shipping.

"They are using this language about being a DMV business partner to create the false impression in someone's mind that you're paying the same amount as if you were on the DMV website. That's not true,'' said Robert Herrell of the Consumer Federation of California. "Consumers are paying, in some cases, hundreds of dollars more beyond what they would pay just by going straight to the DMV website... Which I highly recommend all consumers do go to the DMV website.

Upon realizing her mistake, Raquelle immediately tried to cancel her order.

"I said, 'I'm terribly distressed. I'm 84 years old and I made a terrible mistake and pushed submit in error ," she said, reading from an email she wrote to the company.

There was no response-- just a warning on the receipt that if she tried to dispute the charges on her credit card, it would be considered "fraud."

MORE: Angry CA drivers say DMV lookalike website 'NeedTags' tricks them to paying extra fees

Allen Jensen was also threatened with legal action when he disputed the extra charges on his bill from NeedTags. He, too, didn't realize he was using a private, third party company.
The threats drove him to tears.

"I'm not a criminal,'' he said tearfully during an interview with 7 On Your Side. "I've never been to jail...It's not about the money. Why is my state doing this?"

Allyn Peterson of San Jose also fought the charges and lost. What surprised him most: The DMV authorizes these companies to conduct DMV business, and doesn't limit the fees they can charge.

"My problem is, why is our government enabling them? Why is it officially sanctioned by the government?" Peterson asked.

Now he's pushing for a state law that would cap those fees at 5% more than the DMV registration fee.

"Charging 37% premium to register my car is not fair,'' Peterson said during a hearing before the state Assembly Transportation Committee in April 2025. "I think you owe the citizens of the state protection from NeedTags and their own DMV."

State Assemblyman Matt Haney (D-San Francisco) sponsored the bill in 2025 after seeing our reports about NeedTags complaints.

"You can find yourself accessing services that you can get through the DMV through these online vendors and being charged huge markups on those services," Haney said during the Transportation Committee hearing.

"It was ABC7 that responded... And did a special report then we saw the report..." Assemblymember Haney continued.

"Thank you and we do appreciate... ABC7 for running the important newsworthy report," Assemblymember Lori Wilson, Transportation Committee Chair (D - Suisun City) said in response.

The bill won overwhelming committee support -- but never reached a floor vote.

A second bill introduced by Haney and Assm. Phillip Chen (R - Yorba Linda) in 2026 also cleared committee with overwhelming support. But it, too, has stalled and is expected to fizzle out.

Herrell, the Consumer Federation of California director, believes part of the reason is the money these companies bring to the DMV coffers. The DMV gets $7 for every transaction by its business partners. Consumers who use NeedTags and other third party providers pay that $7 -- it's one of the fees tacked on by the companies, shown as "BPA fee."

The DMV partners with more than 6,000 auto-related companies statewide. Collectively, those business-partner fees generate roughly $35 million a year. for the DMV

Though it's not a huge sum compared to the DMV's $1.4 billion budget, Herrell contends it's still money the DMV wants to hold on to.

"The DMV has this sort of secret, maybe not-so-secret alliance with these business partners, because the DMV gets a piece of the action for every transaction these other partners do,'' Herrell said. "And so they kind of are defending the indefensible, in my opinion, because you can't defend charging someone, you know, $300 and $400 for what should be a $200 registration renewal."

MORE: 7 On Your Side reporting on DMV look-alike website 'NeedTags' prompts new CA legislation

The DMV did not respond to assertions that the DMV is benefitting from the fact some consumers are paying extra fees, and punishing those who use the sites by mistake. The DMV also did not address the many complaints from consumers saying they were misled into using private services and paying higher fees.

However, in a statement to 7 On Your Side, the DMV urged Californians to use the free DMV website, saying: "The California DMV encourages customers to use its online services at dmv.ca.gov to complete transactions without incurring the additional charges of a third-party business partner. The DMV expects any extra fees requested by the service provider to be clear and transparent, and it expects BPA partners to adhere to the law and deliver a valuable service to their customers."

NeedTags owner Eddy Asmerian did not respond to numerous requests for comment. In the past, Asmerian has told 7 On Your Side his company is "committed to transparency." The website does include a message saying NeedTags is not a government agency and charges extra fees for services the DMV provides at no charge.

However, many consumers say that disclaimer is in fine print that is not noticeable.

While lawmakers failed to pass a bill limiting fees, another entity took action: Google.

Ads for private companies offering government services now carry a warning: "Not a government website."

The warning, affixed with a yellow-triangle "warning" icon, now appears on the advertisements by private companies offering an array of government services, like titling, passport applications and DMV services.

Those companies must apply to Google to advertise government documents and services on the platform.

Many consumers who complained about NeedTags said they landed on the site because it appeared at the top of a Google search for terms like "DMV registration renewal."

It's unclear if that warning has had an impact, but a check by 7 On Your Side reveals the NeedTags ad appears less often in a search.

"So what I learned is that...Google did something for the people of California while their public servants say 'give me the money,'" Allyn Peterson said.

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

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