| It's been a tough couple of years for just about | | | | Undisclosed prior vehicle history or damage |
| everyone in this business. There is, I suspect, one | | | | Odometer issues |
| exception though - attorneys that specialize in | | | | Bait and switch advertising |
| suing car dealers. | | | | False & misleading advertising |
| It seems that the recent economy has caused a | | | | Lying about credit scores |
| higher than usual amount of disgruntled | | | | Buy-lease switch |
| customers. An example is the customer who can | | | | Straw purchases |
| no longer afford his or her car payment and | | | | Price gouging or discriminatory pricing |
| would like to find a way out of the deal. Then | | | | Failure to sell at advertised price |
| there are the folks who got used to trading in | | | | Contract re-negotiation |
| their vehicles pretty much at will. No | | | | Warranty fraud |
| down-payment? No problem. Upside-down? No | | | | A number of actions also start out as potential |
| sweat. Well, as we've become painfully aware, | | | | lemon law claims. I've actually seen freeway |
| those days are over. So, unfortunately, there are | | | | billboards for Lemon Law attorneys. The infamous |
| customers out there who feel that they got | | | | 10,000 RV negative equity case in California began |
| "screwed" by a dealer because they owe far | | | | as a service contract dispute on a used motor |
| more than their vehicle is worth and actually need | | | | home. Once the plaintiff attorneys got their hands |
| money down to trade it in. | | | | on the deal jacket, well, the rest is history. |
| Enter the consumer attorney. Just Google "auto | | | | Unfortunately, dealers are more and more |
| dealer fraud" and you'll see what I mean. Besides | | | | frequently becoming the targets of lawsuits, |
| the numerous law firm websites, you'll find several | | | | enforcement actions and, of course, the |
| consumer advocate sites which "educate" people | | | | associated negative publicity. Attorneys general in |
| about "car dealer scams". After browsing through | | | | many states identify accusations against |
| a few of these sites, a consumer may decide to | | | | dealerships as being their #1 concern, and |
| call for a "free consultation" or ring up his local | | | | recognize the political capital in going after dealers. |
| attorney general's office. Not a pleasant thought. | | | | It's more important than ever for dealers to dot |
| An innocent dealer can easily become the target | | | | their "I"s and cross their "T"s when it comes to |
| of a government investigation or lawsuit simply | | | | compliance. Processes should be put in place to |
| because a customer is trying to wiggle out of a | | | | ensure that transactions will hold up to legal |
| transaction. | | | | scrutiny in case of a customer complaint, such as: |
| According to some of these websites, these are | | | | A vehicle history report should be run on all |
| some potentially "fraudulent activities" by dealers: | | | | used vehicles to detect potential disclosure |
| Improper contract disclosure and concealing | | | | problems such as prior rental, damage, mileage, |
| material facts | | | | title issues, etc. |
| Negative equity/Over allowances | | | | A consistent process should be used for |
| Payment packing | | | | quoting payments, rates, etc. |
| Backdating of rewritten contracts | | | | Consider having price caps on F&I products. |
| Forced service contracts or "add-on" concealment | | | | Have an extra set of eyes check out all |
| Undisclosed deferred down payment | | | | paperwork. If a mistake or oversight is |
| Foreign language translations | | | | discovered, correct it immediately. |
| Used vehicle disclosures/Misrepresentation | | | | All employees should be properly trained in |
| New/Used/Demo/Unwind misrepresentation | | | | both legal compliance and company procedures. |
| Forgery | | | | In this environment, it is vital to take compliance |
| Fraudulent credit applications | | | | seriously and understand that it is downright |
| Improper Contract Rescissions | | | | fashionable to target auto dealers. Let's not make |
| "Yo-yo financing" or spot delivery | | | | it so easy for them. |
| Overcharging of fees | | | | |