New Jersey Lemon Law Lawyer Blog

Consumer Fraud and the Uniform Arbitration Act

As previously stated in many of these posts, the dealers frequently use arbitration agreements as a method by which they bypass the court system. There are numerous organizations including JAMS, NAF and American Arbitration Association. All of these organizations ordinarily have consumer due process protocols for these arbitrations. The question is what happens when you win an arbitration and the dealership refuses to pay the arbitration award. Unfortunately, this is not an easy process but there is a provision in the Uniform Arbitration Act for the Superior Court to confirm an arbitration award entered by an arbitrator. Basically, the petitioner must file an order to show cause (fancy words for a court action) to confirm the arbitration award so as it can be entered into the docket system and be docketed against the dealer’s property. There is an entire provision under the court rules for a filing of an order to show cause and is relatively complicated. Nonetheless, the Court is permitted to confirm this arbitration award so long as there is not a basis to vacate the arbitration award filed by the loser of the arbitration. Once the arbitration award is confirmed by the Superior Court, it becomes a judgment docketed and the petitioner or plaintiff may use this docketed judgment or award as any other docketed judgment or award. Moreover, the Uniform Arbitration Act provides for the payment of counsel fees and costs associated with domesticating or confirming an arbitration award. The New Jersey Consumer Fraud Act also provides for the payment of counsel fees with the collection of a consumer fraud judgment. This was decided in the case of Tankersley wherein the Appellate Division held that an attorney who was attempting to collect judgment on a consumer fraud award would be entitled to counsel fees and costs. The Tankersley case involved the collection of a judgment against a car dealership.

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 a $500 or 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 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 supplying of police report, notification within 30 days, and documentation from the insurance company and all sorts of other extras they are required to process this claim.

WAIVER OF CONSUME FRAUD CLAIMS AND CONSUMER FRAUD

The litigation in this case arises out of the plaintiff’s allegations that the defendant committed fraud and consumer fraud with regard to the performance of a home improvement contract. See Cox v. Sears, 92 N.J. 1 (1994). The defendant now relies upon arbitration clause and move to have the case dismissed. The arbitration clause provides the following:
Any dispute, controversy or claim arising out of or relating to this contract at the option of Care Temp may be submitted to binding arbitration with the American Arbitration Association and judgment on award may be entered in any amount entered in any court or company jurisdiction
The arbitration clause as written is unenforceable under New Jersey law as promulgated by the New Jersey Supreme Court. In Garfinkel v. Morristown Obstetrics and Gynecology Associates, 168 N.J. 124 (2001), the court refused to enforce an arbitration agreement because the arbitration agreement failed to specifically include a waiver of statutory rights. The Supreme Court held that without the specific waiver of statutory rights, the agreement could not be said to encompass those statutory rights in the context of an arbitration clause. In Garfinkel, the court refused to force the plaintiff to arbitrate their statutory law against discrimination claims because the arbitration agreement specifically failed to include a waiver of statutory rights.

There is an internet news release indicating that Daimler will honor warranty claims and Lemon Law Claims.

Hopefully we will get some specifics and provide another update.

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CAR DEALERSHIP SELLS CAR TO TWO BLIND PEOPLE.

This is not a joke. It is true.

The names will withheld until suit is filed BUT today I saw, possibly, the worst case in the many years that I have been doing this type of work.

Both of my clients are legally blind. The primary obligor and the cosigner. They do not even have a driver’s license nor are the permitted to drive. The dealership even got the car registered and insured. The customer was at the dealership with his cane and his glasses. When they told me the story it was hard to believe. They are both legally blind.

To make matters even worse the car is a mess. It looks like it was in a prior accident with a different hood and various parts are melted on the interior of the car. They were told the car had only one prior owner when it had two.

The following are the causes of action (theories of liability) against the dealer and/or the lender.

• Consumer Fraud-deceptive conduct. Cox v. Sears.
• Fraud
• Breach of contract
• Breach of good faith and fair dealings. Wilson v. Hess
• Revocation. Cuesta v. Classic
• Negligence
• Discrimination against disabled persons, the blind. Law against discrimination.
• Declaratory relief that the contract is void ab initio (from the beginning)

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What is UDAP?

Unfair and deceptive Practices Acts. The New Jersey Consumer Fraud Act would be considered a UDAP statute. The purpose is to assist consumers in battling fraud in the market place and provides several protections top consumers that are meant to encourage consumers to bring suit and attract competent lawyers to litigate the cases. The UDAP statutes include provisions for tripled damages, attorney fees and injunctive relief. The State AG's office is also permitted to bring suit under the Consumer Fraud Act.

The UDAP statutes vary significantly by State, with some providing more protection that others. There is a published report indicating the strength and weaknesses of all the statutes for all of the 50 states. The report indicates that Michigan and Rhode Island are the two weakest statutes because the courts have interpreted tham to cover almost no transactions.

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The fear of buying a car

Many people have a fear of having to go to a dealership and purchase or lease a car. There are so many pitfalls. How do you get answers to important questions? Where did the dealership get the car? What did they do to it to get it ready for sale? Did they really inspect the car and what did they find in that inspection? These are basic safety issues and concerns that need to be answered. It is very important to get accurate answers to these questions. There is almost no option except to trust the dealership. Remember that you are dealing with the salesman not the service department. Can you really get an accurate answer?

After these most basic questions are answered you still have to be concerned about the financing and the terms of the transaction for the purchase either lease or purchase. As an example what is the best interest rate available, what are the real terms of the financing? What are the products that are being packaged with the vehicle? What is GAP and what are the terms of the coverage? What is the real cost? You need to ask all of these questions and get answers in writing, if possible.

The best thing to do is get everything in writing and do you research as best you can. Do a CARFAX and also try to get you own financing? Ask a lot of questions to feel the salesman out and don’t get timid when you need a question answered or you are not sure.

There are many New Jersey cases that demonstrate examples of the type of conduct might be determined to be consumer fraud or auto fraud.(each case turns on its own set of facts)

Delany v. Garden State Auto Mall: The dealer sold products without full disclosure.

Romano v. Galaxy: Violation of Federal Odometer Law

Cuesta v. Classic: Odometer Roll Back

Sema v. Automall : Misrepresenting the vehicle as new when it was a demo

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What is the status of the auto industry?

There are strong arguments on both sides for the failure of the GM or Ford. 239,000 people are directly employed by the big three. My only question is whether the problems experienced by the big three is the problem or a symptom of the overall ecopnomy?

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Wachovia Settlement

It appears that Wachovia Corp settled for up to $125 million for the following

The telemarketers then used that information to write checks to themselves, purportedly from the consumers they had called. These checks did not require a signature from the accountholder; instead, the signature block included text such as "authorized by your depositor, no signature required."

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Hotel Charges that are Fraudulent. Many business such as hotels are looking for shortcuts by charging, without notice, for many supposed services.. The following are things that you should look for in any hotel stay.

Mandatory bellman charges:
Fees for cancellation
Fees for holding bags
Fees for early departure
Fees for energy surcharges
Fees for handling FEDEX packages
Fees for faxes
Fees for in room safes
Fees for the internet
Minibar fees for restocking
Amenity fees
Phone surcharges

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New Jersey Division of Consumer Affairs

The State has a great site dedicated to Lemon Law in the State of New Jersey.

There is a list of publications at the Division of Consumer Affairs site.

File a complaint

Licensing Board information.

Division of civil rights

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New Jersey Lemon Law

Are there any specific requirements under the New Jersey Lemon Law to send a letter to a Manufacturer before you either file suit or request a hearing before an administrative Judge.

If you file a claim in Superior Court the answer is no, there is no requirement to send a letter to the manufacturer. But if you do send the letter there is a presumption that the vehicle is a lemon.

If you file a request for an administrative hearing you are REQUIRED to send the pre suit letter otherwise the court will not hear your claim.

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Gresham’s AutoLink faces investigation for consumer fraud
According to an internet source an Oregon dealership is being investigated for improper conduct. They have served search warrants after many many consumer complaints. Auto Link

This is what happens when there are too many consumer complaints against one dealer in a short period of time.

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Selling Damaged Cars and Disclosure

I guess the initial question is why would a dealership sell damaged cars and not tell the consumer? The real answer is because they can. The dealership knows that if they tell the customer this material fact the prospect will never buy the damaged good, especially if they have a family. As an example if the dealership purchased the car at auction the seller is required to make material disclosures as to frame damage or other significant damage. There is an entire light system at many auctions - green - yellow - red - to advise as to the condition of the car. If the auction requires disclosure why doesn't the dealer provide the same courtesy to their customers. Because they can.

The law on selling damaged cars is straight forward, material facts are required for disclosure. The dealer is also responsible for any affirmative representations that they make on the sale of the car. If the dealer says that the car was not in an accident they better make sure that the car was not in an accident.

Salvage and flood title Cars

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Car repair scams. Car repair scams are everywhere.

How do you protect yourself from car repair scams. There is no easy answer because unless you a mechanic you are at the mercy of the mechanic. I would say the following are the most common types or areas where car repair scams proliferate.

Padding The Bill. Do we know what was actually completed?

Transmission Shops. What really is the condition of the car

Other charges. What are the minor charges that you do not recognize.

Cost What is the real cost of the repairs

In order to assist you I found a web site that addresses all of these issues ans would recommend a thorough reading.

What is the law on car repair and car repair scams.

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THE MAGNUSSON MOSS ACT
The following are elements of a Magnusson Moss Warranty claim

1. The term ``consumer product'' means any tangible personal property which is distributed in commerce and which is normally used in for personal, family, or household purposes. 15 U.S.C. 2301(1)
2. The term ``consumer'' means a buyer of any consumer product, any person to whom such product is transferred during the duration of an implied or written warranty (or service contract) applicable to the product, and any other person who is entitled by the terms of such warranty (or service contract) or under applicable State law to enforce against the warranty (or service contractor) the obligations of the warranty (or service contract). 15 U.S.C. 2301(3)
3. The term ``supplier'' means any person engaged in the business of making a consumer product directly or indirectly available to consumers. 15 U.S.C. 2301(4)
4. The term ``warrantor'' means any supplier or other person who gives or offers to give a written warranty or who is or may be obligated under an implied warranty. 15 U.S.C. 2301(5)
5. The term ``written warranty'' means– (A) any written affirmation of fact or written promise made in connection with the sale of a consumer product by a supplier to a buyer which relates to the nature of the material or workmanship and affirms or promises that such material or workmanship is defect free or will meet a specified level of performance over a specified period of time; or (B) any undertaking in writing in connection with the sale by a supplier of a consumer product to refund, repair, replace, or take other remedial action with respect to such product in the event that such product fails to meet the specifications set forth in the undertaking, which written affirmation, promise, or undertaking becomes a basis of the bargain between a supplier and a buyer. 15 U.S.C. 2301(6)(A) and (B)
6. The term ``implied warranty'' means an implied warranty arising under State law in connection with the sale by a supplier of a consumer product. 15 U.S.C. 2301(7)
7. The term ``service contract'' means a contract in writing to perform, over a fixed period of time or for a specified duration, services relating to the maintenance or repair (or both) of a consumer product. 15 U.S.C. 2301(8)
8. The term ``remedy'' means whichever of the following actions the warranty means whichever of the following actions the warrantor elects:
(A) repair;
(B) replacement; or
(C) refund.
15 U.S.C. 2301(10)
9. The term ``replacement'' means furnishing a new consumer product which is identical or reasonably equivalent to the warranted consumer product. 15 U.S.C. 2301(11)
10. The term ``refund'' means refunding the actual purchase price. 15 U.S.C. 2301(12)

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Car Salesman Code Words

Car Salesman have code words for many situations and they are not flattering. Most imply that are maximizing the profit or poor negotiating skills of the salesman. They are real.

(from edmunds.com)
Be-backs - A customer who leaves the car lot promising to return later, saying, "I'll be back," or some variation of that statement. "The guy was a be-back. But I think he meant it. I'll see him again."

Boss - The typical way that salespeople address the managers or the GM. "Hey boss! Got a deal for you!"

Bumping - Raising the customer's offer for a car. "If Mr. Customer says he only wants to pay $250 a month, just say, 'Up to -- ?' He'll probably bump himself up to $300 without you doing anything."

Closer - An experienced salesman who is brought in to "close" the customer by making them agree to a deal. "If I worked with a better closer I'd have more units on the board."

Desk - This is the sales manager, not the place he sits. "Ask the desk if these rebates are still in effect."

Demo - This is the test drive. "This guy comes in, demos the car and I think he's ready to buy, right? Then he tells me the car's for his wife and he can't make a decision without her."

F&I - This stands for the Finance and Insurance office where the documents are signed. The F&I salesperson usually will push products such as extended warranties, fabric protection and alarms. "The wait for F&I is two hours. Better stick with your customer so they don't leave."

Full pop lease - This is when a vehicle is leased at 110 percent of the sticker price - the highest amount allowed by most banks. "I got them into a full pop lease. I'll get a nice voucher for that."

GM - The General Manager. The GM is the head honcho at the dealership. He runs the business from day to day. "The guys were standing out on the curb drinking coffee so the GM called them into the tower and read them the riot act."

Green pea - A new salesperson. "The funny thing is, green peas can outsell the veterans. That's because they don't know how hard this job is."

Grinder - A customer who negotiates for hours over a small amount of money. "We were only $500 apart but the guy wouldn't sign. Man, what a grinder."

Lay down - A customer who takes whatever deal the salesperson offers. "I quoted him monthly payments of $575 and he took it! I wish all the customers were lay downs like that."

Mini - The commission on a deal where the car was sold at close to invoice price. "Sure, the deal was only a mini. But I qualified for a weekend bonus and made a grand."

Mooch - A customer who wants to buy a car at invoice. "People are spending too much time on the Internet. It's turning them into a bunch of mooches."

Packing payments - Adding extra profit to the cost of a car. "This place I used to work got busted for packing payments. Next job I get is going to be in a no-haggle store."

The Point - The place on the car lot where the "up" man stands looking for customers. "The GM saw me standing on the point with my hands in my pockets. He went ballistic and sent me home for the day."

Pounder - A deal with $1,000 profit in it. "Doctor comes in and buys the top of the line model, fully loaded - and he pays sticker! That'll be a two pounder for me."

Rip their heads off - This describes taking a customer to the cleaners. "I stole their trade in, I sold them the car at a grand over sticker - I mean, I just ripped their heads off."

Roach - A customer with bad credit. Not to be confused with the "roach coach" (see entry below). "The guy looked good. But we ran his credit and he turned out to be a roach. We're talkin' a 400 credit score here."

Roach coach - The food truck that comes around to the dealership every day. "I should've known better than to eat that chili from the roach coach. My stomach's killin' me."

Spiff - A tip, kickback or payment of any kind, usually cash which is handed between salespeople. "I spiffed the F&I guy $20 bucks and he took my customers first."

Strong - This has a special meaning on the car lot. It means holding firm on your price and being a tough negotiator. "When they ask for your price you have to be strong. Hit 'em with high payments, then scrape them off the ceiling and start negotiating." (See also "weak.")

Tower - The office where the sales managers work. This is usually a raised platform allowing the managers to see over the roofs of the cars so they can watch customers and their salespeople. "Attention: All new car salesmen report to the new car tower!"

Turn over - Also known as "turning," this is the practice of passing a customer from one salesman to another. It is thought that this will prevent customers from leaving the car lot. The theory is that the customer might just have bad chemistry with the first salesman and he might like the next salesman. "I turned this guy to my partner and he wound up buying. I'll get half of the commission on the deal."

Up - A customer that walks on the car lot. The term probably comes from the order in which customers are taken, as in: "I'm up next." Many dealerships also have an up system. "We've got ups all over the lot, and you're in the back drinking coffee?!"

Voucher - Car salespeople receive a voucher to let them know what their commission was for selling a car. They don't know until the deal is finalized exactly how much they will receive. "Check out this voucher. I thought I had a pounder. Instead it's a mini."

Weak - This describes being a weak negotiator or coming down too quickly on price. "The guy was weak so he only lasted a few months. How are you going to make money in this business if you give away cars?"

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Banks Duty In A Repossession

The bank or the lien holder has the duty to assure that a repossession is conducted without a breach of the peace. The lien holder has a non-delegable duty to assure appropriate repossession. New Jersey has adopted the rule that a lien holder has a non-delegable duty to effectuate a repossession without a breach of the peace. See DeMary v. Rieker, 302 N.J. Super. 208, 221 (App. Div. 1997). In this case the plaintiff was injured during a repossession attempt. The lien holder, Chase, claimed that the repossession company was an independent contractor and, as such, there was no liability. The Court held that N.J.S.A. 12A:9-503 only authorizes a repossession without judicial process where it is accomplished without breach of the peace, because there is the distinct probably that an involuntary repossession may become a highly confrontational situation where the person confiscating the property of another particularly when the other believes they are entitled to keep the property, there is potential for a dispute.

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NHTSA Technical Service Bulletins

Your car might have problem of which the dealer and/or the manufacturer have knowledge.
You should check this database before you purchase any car, new or used.

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Odometer Roll Back

The Star Ledger reported that a man admitted to odometer fraud in Federal Court on a case that has been pending since 2004.

In 2004 the FBI arrested 17 in a ring that was alleged to have been rolling back odometers.

It was alleged that:

Robert FIORELLO was the financier of the following businesses and as the leader of the Criminal Enterprise, directed all activity in this illegal operation;

JPF AUTO SALES, Bloomfield, NJ
SEMI MOTORS, Garfield, NJ
TRIBUTE AUTO SALES, Bloomfield, NJ
MJS AUTO SALES, Bloomfield, NJ
RP AUTO SALES, Keansburg, NJ
BLOOMINGDALE MOTORS, Bloomfield/Bridgeton, NJ

The enterprise was purchasing cars and rolling the odometers back by hand and by using a computer. The cars would be resold for a higher amount due to the lower mileage.

Odometer roll back

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http://www.consumer-attorney.com/lawyer-attorney-1299380.html