Articles Posted in Car Dealership Fraud

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WRONGFUL REPOSSESSION CLAIMS, CLASS ACTIONS AND CONSUMER FRAUD

A brief review of the internet on the search wrongful repossession class action will yield a plethora of results indicating that this is an extensive, ripe and very litigious area of law both on the individual and class action basis. When you are dealing with wrongful repossession on an individual basis or a wrongful repossession on a class action basis, it seems to mostly arise out of the processing of paperwork either before, during or after the actual repossession.

On occasion, the wrongful repossession deals with the inappropriate conduct of a repossession company or an agent of the repossession company. However, as previously set forth, most of the lawsuits, class actions and wrongful repossession, and consumer fraud lawsuits arise out of the post-repossession notice of intent to sell and post-sale paperwork, which would include necessary accounting.

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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 it 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.

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Appearance Package, Wheel Well Molding, Door Edge Guards
Some dealerships use the sale or attempted sale of door edge guards, wheel well molding or pin striping, commonly known as appearance packages, to increase the costs of the vehicles. Frequently, these pre-delivery services are not included anywhere in the buyer’s order but only on a price addendum placed on the automobile. New Jersey law is relatively straightforward and requires a consumer to sign off and acknowledge the purchase of any pre-delivery services on the sale of an automobile. The dealership uses the guise of these expensive products, which increase the “sticker” price of a vehicle. When the customer sits downs and looks at all the paperwork, it is not apparent that these items are included in the price anywhere. This is the intention behind the New Jersey Consumer Fraud Act and the associated Administrative Code regulations requiring consumers to acknowledge purchase of pre-delivery services. Even if these were considered aftermarket items or different types of products, it would still be appropriate for the dealer to disclose the nature and extent of these products, any warranties that were associated with these products, and the costs thereof. The best advice would be to be very careful in the injunction of negotiating a purchase price on a new vehicle and demand for an itemization of any and all products and/or services that you are acquiring or think you are acquiring as part of the automobile purchase. The dealership is required to disclose this to you fully and honestly and the best way to do this would be to bring a piece of paper where the dealership would sign off on the specific products which you are purchasing. This would forego any potential confusion and document exactly what you are and are not purchasing.

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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.

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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.

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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.

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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.

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