New Jersey Lemon Law Lawyer BlogThe 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.)
Articles Posted in Car Dealership Fraud
Car dealer, salesman indicted in fraud involving dealership
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?
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?
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.
Car Salesman Getting Ripped Off? Part I
Guess what? In the car business dealer stake as many liberties with their employees as they do with the customers. There are two basic profit centers: the front end and the back end. The salesmen get paid on the front end only. This is the “cost” of the car, as compared to the selling price. Some people think the cost is the invoice of the car, better known as tissue. The higher level employees get paid on the overall profit of the dealership, which includes all the items considered after market, warranties, etc.
The problem occurs when calculating the cost for calculation of the gross commisionable proceeds for the employees.The dealers add costs to the acquisition price of the car. Some dealers call them “ups.” The dealers increase the cost by the amount of the ups to reduce the commissions.
Usually the pay plans are based on the costs of the products. The dealers take liberties with increasing the cost of the vehicles without disclosing this to the staff, because they exclusively control access to this information.
Affirmative misrepresentations are actionable under the New Jersey Consumer Fraud Act
Affirmative misrepresentations are actionable under the New Jersey Consumer Fraud Act. See, Cox v. Sears, 92 N.J. Super 1, (1994). In order for an affirmative misrepresentation to be actionable under the New Jersey Consumer Act, it must be 1) material to the transaction; 2) fact; and 3) false. See Gennari v. Weichert Realtors, 148 N.J. 582, 607 (1993); Vaccarello v. Massachusetts Mutual Life Ins. Co., 2000 W.L. 76404 (App. Div. 2000); Ji v. Palmer, 33 N.J. Super. 451 (App. Div 2000)
A statement is material if: a) a reasonable person would attach importance to its existence in determining a choice of action; b) the maker of the representation knows or has reason to know that if its recipient regards or is likely to regard the matter as important in determining his choice of action although a reasonable man would not so regard it. See Ji v. Palmer, supra.
In Ji, the Appellate Division held that the trial court improperly dismissed the plaintiff’s Complaint at the end of the plaintiff’s case. The Appellate Division held that the plaintiff properly set forth a prima facie case and, as such, the trial court was mistaken and the case should be reinstated. In Ji, the plaintiff purchased commercial real estate and alleged that the defendant made an affirmative misrepresentation at closing that the Certificate of Occupancy satisfied the City’s requirement that a Certificate of Land Use be obtained upon transfer of title. The trial court, improperly, dismissed the plaintiff’s case because the plaintiff could not show that the misstatement was made knowingly. The Appellate Division reversed, holding that the plaintiffs were not required to show the defendant’s knowledge of the falsity of his statement or an intent to deceive. The plaintiff sufficiently proved that the defendant made a material misrepresentation of fact, which was false. The Court held: The Consumer Fraud Act is intended to protect consumers from deception and fraud, even when committed in good faith. An intent to deceive is not a prerequisite for the imposition of liability.
Used-car salesman charged with fraud!
It’s never-ending. How many of these stories do we see on a daily basis on the internet and read in the newspapers? Charged with fraud: his name is Vahid Sedaghat, 52, and the criminal complaint was filed in Ramsey Country District Court. Please remember: innocent until proven guilty.
Do Automobile Dealers Know when Cars Have Been in an Accident? Part II
TECHNOLOGY
Reasonably priced technology assures that dealers are aware of any damage to a car that they sell. An Elcometer. This device measures the thickness of the paint on the car. There are manufacturer standards for paint thickness. There are standards for consistency on a car. This device can absolutely warn a dealer if a car was repainted. This raises a red flag that the dealer must take a closer look at the car. They will then see other evidence that the car was wrecked, such as frame repair, over spray or bondo on the car. This is all obvious to anyone with any automotive experience, especially a dealer selling cars for a living. There are also frame machines that can measure even slight imbalances in the frame. These are a reasonably-priced option for the dealers selling cars to the public. Don’t you think they should take the steps necessary to assure the cars that they both buy and sell are safe for the public’s use? Does it seem to be asking very much? Not really.
Do Automobile Dealers Know when Cars Have Been in an Accident? Part I
The answer is simple: YES, YES, YES.
AUTOMOTIVE INDUSRTY STANDARDS
Dealers are required to inspect the cars before they sell them to the public. Industry standards mandate this result. They are in the best position and have the expertise to make these safety inspections. This aside, common sense mandates this result. Why would a dealer want to open himself to liability for selling a dangerous car when they had the chance to assure the car was safe? At a minimum they do not want a pissed-off customer with many mechanical complaints. Bad for business. Might cost the dealer money in repairs. Might get sued.
Also, the dealer has a process for acquiring cars from auctions, on trades and by wholesale to assure that the cars are not damaged. Most of the auctions have special designations for damaged cars. Green light means no problem while cars sold under the yellow and red light have problems, mechanical or otherwise. Manheim Auto Auction is the main source of cars for these dealerships and they have a detailed system of disclosure. Manheim actually offers an inspection service for those buying and selling cars at the auction to assure an open and honest marketplace.
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FLORIDA AUTO DEALER FOUND GUILTY OF FRAUD
According to the ledger.com John Giovanetti, former owner of Big Oaks Buick Pontiac GMC, Inc., located at Bartow, Florida, was found guilty by a federal jury of wire fraud and bank fraud. According to this story, Mr. Giovanetti was using advances from his credit line to run the dealership rather than acquire vehicles for sale. It was asserted that there were fraudulent documents which were submitted to the finance company, SunTrust, listing vehicles that had already been sold by Big Oaks. The indictments specifically read “that the money obtained from the bank was used to finance their daily operations and support of the owner’s lifestyle.” This just demonstrates that not only do the customers need to be careful but the bank’s lenders as well. Be careful, be very careful.
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