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North Carolina’s 124 private license-tag contractors handled more than 10.3 million transactions worth hundreds of millions of dollars in the past year, but not one contractor was subject to a criminal background check.

It’s unclear whether such checks would have headed off the “fraudulent activity” Division of Motor Vehicles officials cited in closing down two such offices in High Point and Thomasville two weeks ago. But with the High Point agency grossing more than $200,000 last year and Thomasville’s about $174,000, some customers said they were shocked to learn employees weren’t more carefully screened.

Tameka Richards, 26, came to the High Point agency last week to find it shuttered. When she heard about the fraud investigation, she said she worried about doing business at the agencies.

“I never really thought about it, but I just assumed they were state employees,” Richards said. “I guess now since they’ve been closed down I’m thinking, who was handling my money and all my information?”

Other states, such as Minnesota, also use private contractors to help issue plates and renew registrations, but they opt to check the criminal histories of those they hire for the job.

North Carolina agency employees do have to be bonded by an insurance company, according to DMV spokeswoman Marge Howell. The agencies pay a $50,000 deductible to cover “employee dishonesty” but are not required to — and routinely do not — ask for criminal histories.

“At the present time it’s not required. It’s something we will be reviewing,” said Portia Manley, DMV assistant director in charge of vehicle services.

States vary in how they handle issuing tags and renewing registrations. Some handle it entirely through the state’s DMV. Others contract with local governments to handle the work.

North Carolina does some registration centrally and has two state-run offices. The General Assembly ordered this month that plans for one-stop driver’s license and plate registration offices be put on hold for at least a year.

But most local offices across the state are run by private citizens who contract with the DMV. They must be bonded and meet some minimum financial requirements but have never been subject to criminal checks by the state.

That network of private agents was codified in the 1960s, Manley said.

“It goes back many years, and it was just a political patronage thing done in the past,” said Rep. Nelson Cole, a Rockingham County Democrat who is one of the leading voices on transportation issues in the House.

Cole said he didn’t foresee dismantling the private tag agent system. However, he said that DMV was expanding its use of criminal background checks in vetting some employees.

“It’s probably something we need to look at and maybe expand it to our contract agents,” Cole said. “It’s a lot of money that these folks collect over a day, a week and a month.”

Manley would not say what exactly may have gone wrong at the High Point and Thomasville offices, which were opened during the 1990s. Letters her office sent to Judith and Danny Hancock, the operators, did not cite a specific problem.

But this is not the first time that a privately contracted tag office has been shut down.

In 2005, the DMV shut down an office in Boone, saying that evidence of fraud had been found. That contract was eventually given to Watauga County.

In fact, nine of the 22 tag offices contracted by the DMV since 2000 have gone to local governments or chambers of commerce.

“We seek out the best-qualified person,” Manley said, adding that there was no preference for local governments. “At the time, it may be the county that’s best qualified, or it may be an individual.”

Tag agents are subject to audits every 30 to 45 days that check to see that deposits are made daily and that other paperwork is kept in order.As for the offices in High Point and Thomasville, the DMV is looking for contractors to reopen them.

Contact Mark Binker at (919) 832-5549 or mark.binker@news-record.com

Contact Joe Killian at 883-4422, Ext. 228, or joe.killian@news-record.com