The State Worker

Get a speeding ticket? California traffic schools are gaming the DMV to get your business

A few owners of online traffic schools in California have taken advantage of loose oversight by the Department of Motor Vehicles to stifle competition and boost their share of customers among the roughly 670,000 ticketed drivers who enroll in the schools every year.

State law lets drivers hide minor infractions from car insurers if they complete traffic school courses, which migrated from classrooms to the internet about 20 years ago. The online courses have proved lucrative for some school owners, thanks in part to built-in advertising they get from appearing on a list of randomized schools that is passed out at courthouses and maintained online.

The list has tripled in size over the last two years, reaching about 3,000 schools as a few owners added hundreds of identical websites with names such as No Study Traffic School, Five Dollar Traffic School, Shortest Course Allowed and Easy Daddy Traffic School. Many school names differ only by a number at the end of the name, and different schools often have the same owner, but there’s no easy way for a customer to know that.

“It’s misleading the public,” said Steve Soldis, a founder of one of the state’s original online traffic schools, Traffic School Online. “They’re unaware of who they’re doing business with.”

An Assembly Transportation Committee report found five owners controlled about 74 percent of the schools. DMV records show there were fewer than 1,000 licensed schools as recently as January 2017. The number increased to about 1,400 in January 2018 and leapt to around 2,200 in January of this year. It had grown to about 3,000 by March.

The DMV charges about $450 to license a new school, and owners must file a $15,000 bond with the department. The owners must obtain DMV approval for each school’s curriculum, and they can use the same curriculum for multiple schools. They pay about $100 per year to renew schools’ licenses.

School owners say they are making money despite the license and renewal fees. About 675,000 ticketed drivers took the traffic courses each year from 2016 through 2018, according to DMV figures.

Traffic school names multiply

The DMV took over supervision of the schools from the courts in 2012. Its regulations prohibit school names that are “so similar to an existing school name so as to cause confusion to the public, courts or the department.”

Some school owners say enforcement of that rule has been lax.

One school, called Click or Call to Start, appears on the list at least 500 times, with each entry differing only by a number at the end of the name. Best Cheap school, registered to No Brainer Traffic School LLC, appears 100 times. Easy 4U Traffic School, registered to an LLC named Chong, Fontes and Acree, appears 79 times.

The rules also prohibit any name that “implies that the school offers inducements or premiums which derogate or distort the instruction intent of the traffic violator school program.”

Yet names on the list include No Effort Traffic School, Idiots Traffic School, I Got Caught Traffic School, 4 Lazy Traffic School Online and Five Dollar Traffic School.

Armen GeoSimonian founded Five Dollar Traffic School, which appears more than 100 times on the list. GeoSimonian, of Los Angeles, said the DMV initially hesitated to approve the school’s name based on the prohibition on “inducements or premiums” and a prohibition on names “misleading to the public.”

He said the department agreed to approve the name about four years ago based on the fact that he really does charge $5.

Most other schools charge $15 to $40 per class. GeoSimonian’s launch of the $5 schools cut into the business of other owners, who responded by adding lots more schools to the list.

“My mentality was, add as many as I can to wash him out,” said Derick Maynard, of Bakersfield, owner of Shortest Course on List and other schools that focus on how quickly the course may be completed.

Maynard and his wife, Bethany Maynard, have more than 1,000 schools on the list, more than anyone else in the state.

As competition intensified on the list, Maynard said he challenged another DMV rule.

The department had been requiring owners to have an office suite for each school with a telephone and other minimum equipment. Maynard said he challenged the rule on grounds that it wasn’t explicit in the law, and the DMV let him start opening schools without a specific suite for each one, reducing his costs.

Now GeoSimonian is doing away with the individual offices he was keeping for each school.

“It’s a completely different industry at this point,” he said. “It’s become much more competitive than it was before.”

DMV spokesman Marty Greenstein noted the department reviews every school’s curriculum while saying the department is taking a closer look at other elements of the traffic school industry.

“The (DMV’s occupational licensing branch) strives to monitor and regulate the program within the scope of what is allowed by statute and regulations,” Greenstein said in an email. “The branch has begun reviewing these schools and is looking at the types of issues you raise on a case-by-case basis to correct the inconsistencies.”

Small traffic schools closing

Five owners interviewed for this story agreed the list has gotten out of hand, but they don’t agree on the way forward.

Maynard suggested other owners should adapt rather than try to change the rules.

“If you can’t compete, sorry, you’re out of luck,” Maynard said. “That’s what business is. Why does everybody have to cry?”

Brett Elkins, president of Traffic Safety Consultants, said the current system doesn’t promote fair competition.

“A lot of schools have closed,” Elkins said. “It’s not worth their time and effort. It’s had a pretty big impact on the mom and pop schools and has for a while.”

Soldis has proposed legislation, Assembly Bill 708, to try to reduce manipulation of the list. The bill passed a House committee despite official opposition from GeoSimonian, who said the proposal could create new problems for enforcement while piling on more work and more costs for the already struggling DMV.

Soldis said a drop-down menu for the online list, which he proposed in the legislation, helped solve problems with Michigan’s traffic school list. Texas, Florida and New York have used high licensing fees and other regulations to keep traffic schools well below 100 for each of those states, according to the Assembly Transportation Committee report.

Maynard said he is indifferent about the proposal, but doubts it will succeed in preventing him or others from finding ways to make money.

“It’s a fun game, and I like to win, so I’ll probably reinvent the wheel again as I’ve done multiple times,” he said. “I just like to compete. And it is survival of the fittest.”

Editor’s note: A previous version of this story incorrectly attributed the Assembly Transportation Committee report.
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