BMV overpays $60K to hundreds of drivers; wants money back

(WISH Photo, file)

INDIANAPOLIS (WISH) — It’s happened again. Another accounting error within the Indiana Bureau of Motor Vehicles.

This time, I-Team 8 has learned the Indiana BMV has mistakenly overpaid a total of $60,000 to 254 drivers.

These drivers were among the 180,000 who are owed refunds after being overcharged excise taxes when registering their vehicles. In September, BMV commissioner Don Smenis announced that thousands of Indiana drivers were overcharged a total of $29 million in excise taxes dating back to 2004.

This latest mistake, a spokesman says, was “caught immediately and addressed.”

“All told, the overpayment was $60,000,” said Josh Gillespie, a spokesman for the BMV. “It was a human error.”

Gillespie said that letters were sent out to those affected, asking that the checks either be returned or not cashed.

“If they had already cashed the check, they were asked to return the portion that was an overpayment,” Gillespie said in an email.

A copy of one the letters, provided to I-Team 8, reads as follows:

“The Indiana Bureau of Motor Vehicles recently mailed you a check for a refund of overpayment of motor vehicle excise taxes. There was a processing issue when you particular refund was created which resulted in an overpayment to you in the amount of $_______.

If you have not already cashed this check or deposited it into your bank account, we would appreciate it if you would return it to us in the enclosed postage self addressed envelope…”

It goes on to say that if you have already chased the check, the BMV would like “you to remit the overpayment.” The letter ends with:

“We apologize for any inconvenience.”

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Gillespie said the BMV has processed 146,299 claims so far with an error rate of .002.

“The people affected was a statistically tiny percentage of the overall number of Excise Tax Refund.”

One driver, who contacted I-Team 8 about the error, said she was overpaid almost $800. She cashed the approximately $1,200 check but says she thinks she will return the overage. Still, she was frustrated by the BMV’s mistake.

“It’s kind of insulting that they didn’t do it right the first time and they assume people will give the money back.” she told I-Team 8.

Excise taxes are collected by the BMV and distributed to local units of government, including cities and counties. Indiana law specifies that drivers pay the tax based on the value of their vehicle, which includes an adjustment factor based on new automobile prices. In some cases, the BMV did not apply the adjustment factor, which caused some vehicles to be misclassified, the agency said earlier this year.

Drivers who overpaid should have received a letter from the BMV and filled out a claim form. Reimbursement will depend on how and when the claims were received.

To reduce the impact of those payments on local governments, the state will cover the upfront cost of the refund, then will adjust distributions to local governments over the next two years. The state is also covering the cost of the interest owed to drivers. A recent analysis by the BMV showed counties stand to lose a total of $19.2 million in total funding due to the refunds. That’s about 2 percent of all excise tax funding issued to counties each year.

This latest issue with 254 drivers being overpaid marks another notch in a timeline of alleged accounting troubles.

In August 2013, millions of Indiana drivers were issued refunds as part of a $30 million settlement stemming from the BMV admitting it overcharged drivers under the age of 75 who obtained or renewed a driver’s license between 2007 and 2013. Those overcharges averaged out to be around $3.50, according to court documents.

The following month, the BMV announced that an outside review by a law firm identified fees being charged at a higher rate than state law allowed — per previous I-Team 8 reports.

I-Team 8 has also previously reported that according to a deposition in a lawsuit filed against the agency, the BMV was aware as early as 2010 that some of its fees exceeded the amounts permitted under state law. In that deposition, former BMV deputy director Matthew Foley alleged that the BMV continued to overcharge Hoosiers for at least two years in order to avoid budget troubles.

Attorney Irwin Levin has represented those suing the BMV for overcharges. When asked his reaction to today’s news, he said:

“It is sad but we shouldn’t be surprised by this. What is more significant is that the BMV continues to hide behind a veil of secrecy.”Levin criticized the agency for refusing to be forthcoming with details about how it calculates the excise taxes.

“And now after promising us that they had fixed this excise problem, they now come out and say ‘oh guess what, we didn’t figure it out. We are doing it wrong.

“I would say that arrogance of an attitude that says ‘we caught it quickly’ when the overages started more than a decade ago  – and that the cover up of the charges continues to go on. The arrogance of that is appalling,” he said. provides commenting to allow for constructive discussion on the stories we cover. In order to comment here, you acknowledge you have read and agreed to our Terms of Service. Commenters who violate these terms, including use of vulgar language or racial slurs, will be banned. Please be respectful of the opinions of others and keep the conversation on topic and civil. If you see an inappropriate comment, please flag it for our moderators to review.

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