Car Dealership Fraud

Consumer Fraud and Car Dealerships

September 23, 2009 | Jonathan Rudnick

Car Dealer Tricks – Etch Products
It is a common practice for car dealerships in the State of New Jersey to sell a product known as “etch.” Frequently, this product is preprinted on a buyer’s order or a standard form used by the dealership as part of selling a new or used vehicle. Although the dealership might frequently claim that the purchase of this item is optional, it appears as though it is not optional because it is preprinted on a buyer’s order and it is applied to all the vehicles prior to the time of sale. As a practical matter, I have litigated numerous cases where the allegation was that a representative of the dealership explained to the customer that the purchase of this product was mandatory or part of the transaction. Frequently, this is contradicted by written statements contained in the various documentation prepared by the dealership and signed by the consumer, so they feel they are “protected”.
Quite simply, the purchase of etch is neither required nor usually a good idea. The basic concept behind this etch product is that it somehow deters thieves from stealing a car once this particular identification is etched on the windshield. I have yet to see some type of study that etchings on the vehicle reduce the theft rate on the vehicle. Nonetheless, the benefit paid by the etch is not sufficient to support the amount of money or the price of the product. Usually, this product costs consumers from $200 to $500 and must be compared against the deductible of auto insurance. As an example, if you have a deductible with $500 on an auto and the vehicle is stolen or totaled, it is likely that this could be the maximum amount which would be received by the consumer. So, in essence, the consumer is paying $200 to $500 for a $500 benefit. The risk does not justify the price paid for the product. It is not uncommon that the etch product is sold in conjunction with a gap product which must be compared with the policy of automobile insurance sold with the vehicle. Nonetheless, it is overpriced for the risk assumed. Moreover, the requirements to apply for this benefit are overwhelming. There are numerous requirements, including the supplying of police report, notification within 30 days, and documentation from the insurance company, and all sorts of other extras that are required to process this claim.

Consumer Fraud. Let the seller beware!!!

July 17, 2008 | Jonathan Rudnick

There is a phrase in Latin that means let the buyer beware, Caveat Emptor. New Jersey has abandoned this principle as it pertains to the Consumer Fraud Act. New Jersey, through the Consumer Fraud Act, has adopted a more ethical approach to sales. It is now the law that a person has the right to rely on representations made by another when dealing with that other person. The Consumer Fraud Act jury instructions specifically hold this to be true. 4.43 Consumer Fraud Act

The seller now has the responsibility to make sure that the representations as to their product are accurate and if they are wrong it is the responsibility of the seller of the goods.

Car Salesman Convicted For Scam Involving Mentally Ill Man

June 10, 2008 | Jonathan Rudnick

Car Salesman Convicted For Scam Involving Mentally Ill Man according to an internet news source.

Damaged Cars and Suing the Lender

June 6, 2008 | Jonathan Rudnick

Damaged Cars and Suing the Lender.

You can collect from the lender for defective cars under the HOLDER RULE.

Since the contract that the lender is holding permits the buyer to sue the lender, the lender can be sued up to the amount paid on the contract. The lender is in the position to allocate the risk for such losses and defray the risk.

Consumer Fraud and Damaged Cars?

June 4, 2008 | Jonathan Rudnick

What happens if the dealer sells you a damaged car? Have they violated the New Jersey Consumer Fraud Act?

AFFIRMATIVE MISREPRESENTATIONS VIOLATE THE CONSUMER FRAUD ACT

The law in New Jersey is no longer “buyer beware” and New Jersey has taken the more ethical approach to the sale of goods. The dealer is charged with knowing the goods that they sell, such as cars. If they make a promise that the car has not been in an accident they must make good on the affirmative representation. If their statements are false then the dealer can be sued for a violation of the Consumer Fraud Act, NJSA 56:8-2.

Top Consumer Complaints in New Jersey

April 22, 2008 | Jonathan Rudnick

Used Cars

Computer Sales

Debt Collection

Truth In Lending Act

March 31, 2008 | Jonathan Rudnick

The Truth in Lending Act is liberally construed to protect consumers Burnett v. Ala Moana Pawn Shop, 3 F.3d 1261, 1262 (9th Cir. 1993). Congress enacted the Truth in Lending Act (15 U.S.C. § 1601 et seq. (TILA)) in recognition that uniform credit disclosures would enhance “the competition among the various financial institutions and other firms engaged in the extension of consumer credit,” and “assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit.” (15 U.S.C. § 1601(a).) In this regard, TILA protects consumers from inaccurate and unfair credit practices. (Ibid.; (D.N.M.1998) 12 F.Supp.2d 1230, 1232.) To address the problem of buried finance charges, Regulation Z extends TILA’s coverage to all credit transactions ” ‘for which either a finance charge is or may be imposed.’ ” (1974) 12 Cal.3d 915, 920, 117 Cal.Rptr. 541, 528 P.2d 357, citing former 12 C.F.R. § 226.2(k).) TILA’s purposes have led the courts to strictly enforce its requirements as well as those of Regulation Z. 12 F.Supp.2d at p. 1232.)

Car dealer, salesman indicted in fraud involving dealership

March 14, 2008 | Jonathan Rudnick

The Asbury Park Press is reporting that there have been indictments of Michael Kouvaras, 55, of Maplewood and Salvatore Rivello, 56, of Matawan. They were indicted for theft by deception, identity theft, deceptive business practices and defrauding secured creditors. I will be getting a copy of the indictment form the Prosecutor’s Office so as to comment further. The dealership was Chrysler of Eatontown, according to the Press. I will follow up with details.

What Should You do If You Think You Have Been Ripped Off by a Car Dealer?

March 9, 2008 | Jonathan Rudnick

You have a range of choices, none of which are really attractive.

Return to the dealership and confront the management. You need to be very confident and have the ability to negotiate against skilled salesmen and do it under stress. You don’t have a chance. You know it and the dealer knows it. STAY AWAY. Not recommended.

File a complaint with the Better Business Bureau or the Consumer Affairs Office in your county. They have no ability to force the dealership to do anything. I’ts all voluntary. Just a further waste of your valuable time.

Should You Purchase A Certified Used Car?

March 6, 2008 | Jonathan Rudnick

This depends on your comfort level in negotiating with experienced salesmen and your ability to have the car inspected that you are purchasing. As a general matter, in my opinion, this is not a good purchase. The term “certified” means almost nothing. In the context of a used car sale it only means that the manufacturer has issued a warranty on your car and has required the dealer to perform some extensive inspection. Remember this is not free. There is a charge for this warranty, whether the dealer tells you or not. You are purchasing this warranty. Then the dealer tries to sell you an extended service plan. What a joke.

First of all, shouldn’t the dealer have to inspect the car before they sell the car to the public? Why is this extra? Just purchase your own warranty on the internet and have the car inspected by your own mechanic.

Here is a listing of all the major manufacturers’ certified used car programs.