Georgia Consumer Fraud Attorney

What Documents Should You Get When You Buy a Used Car?

A recent posting by the Georgia Governor’s Office of Consumer Protection helps provide the answer.  Georgia law requires that certain documents be provided to you in completed form before you sign them.  These include the Bill of Sale, The Retail Installment Sales Contract and the Odometer Statement.  If you live in the metropolitan Atlanta area (13 counties) you should also receive an emission certificate.

Also, always remember that any promise by the dealer to do something in the future should be in writing. This includes a warranty.  Dealers have forms to do this often called a “we owe”.

Here is the Governor’s Office posting:

Dear Consumer Ed: 

Car 

When you buy a car, what documents is the dealer required to give you?


A: When you buy a new vehicle, the dealer must provide you with several documents. These include standard documents, such as the sales contract (which is often referred to as the “Buyer’s Order” or “Bill of Sale”).  Depending on your particular circumstances, there may be additional documents the dealer must provide.  For example, if you finance the vehicle through the dealership, you should receive a Retail Installment Contract, and if you agree to a service package, the dealer should give you a copy of the signed Service Contract.  Below is information on the more common documents you should expect to receive when you buy a new vehicle: 


*    Buyer’s Order or Bill of Sale: This is the basic sales contract. The seller should provide you with a copy of the completed and signed contract at the time you purchase the car.  This is very important, because it is required in order to register your vehicle and to apply for a license plate. You should ensure that it reflects the terms you negotiated with the seller.  If the seller made a verbal promise during the negotiations, make sure you get it added in writing before signing anything!

*    Finance Agreement or Retail Installment Contract: If you finance your vehicle through a dealership, Georgia law requires that the agreement be in writing in what is typically called a “Retail Installment Contract”.  The seller must give the buyer a completed copy of this contract at the time the buyer signs it. Make sure that it contains no unfilled blanks before signing.

*    Odometer Mileage Disclosure Form: A  written mileage disclosure statement is required whenever a vehicle is bought or sold, or at the end of a lease.  The disclosure statement includes the buyer and seller’s information, basic vehicle information, and the odometer reading of the vehicle at the time of sale.  This requirement applies to individual sellers as well as dealers.

*    Lemon Law Rights Statement: Under Georgia law, a dealer must give the buyer a written Statement of Consumer Rights that explains the Georgia Lemon Law Act at the time of purchase or lease of any new motor vehicle.  The law is very specific: the Statement must be printed in 11-point type, Arial font, on the front side of a sheet of standard, letter-sized paper that is yellow in color.  The consumer must sign and date the Statement, and the dealer’s representative must print his or her name, date it and give the original to the consumer.

*    Certificate of Title: A vehicle’s Certificate of Title is the document that establishes legal ownership over the vehicle.  When you buy a new car, it is necessary to apply for a Certificate of Title within 30 days of the purchase or else fees and penalties will apply.   If you purchase the new car from a dealer, the dealer should accept the application for title and an Ad Valorem Title Tax (TAVT) payment on your behalf.  The dealer must then deliver the title application and your TAVT payment to the county tag office in the county where you plan to register the vehicle.  If you paid for the new car in full and didn’t finance it, when the title is issued it will be sent to you.  If you financed the car purchase and the finance agreement created a lien or security interest in the car, the title will list any lien or security interest holder and the title will not be released to you until you finish making the agreed upon payments.


Used Vehicles

When a dealer sells you a used car, it must provide you with many of the same documents as are required for a new car purchase, with some exceptions and additions:

*    Buyer’s Order or Bill of Sale: Just as with a new vehicle, a used car Buyer’s Order or Bill of Sale is the basic sales contract between the buyer and the seller.  The seller should provide you with a copy of the completed and signed contract at the time of purchase so that you can register your vehicle and to apply for a license plate.  Again, you should ensure that the contract reflects the terms you negotiated with the seller and that you get all verbal promises in writing before signing.

*    Finance Agreement or Retail Installment Contract: Just as with new cars, used cars are often financed through the dealership.  If so, Georgia law requires that the finance agreement be in writing in a retail installment contract.  The seller must give the buyer a completed copy of this document at the time the buyer signs the contract.

*    Odometer Mileage Disclosure Form:  As with new vehicle purchases, whenever a used motor vehicle is bought or sold, the seller must provide a written mileage disclosure statement. Again, this requirement applies to individual sellers as well as dealers.

*    Buyers Guide: Under the Federal Trade Commission’s Used Car Rule, a used car dealer that sells six or more cars a year is required to post a Buyers Guide in every used car they offer for sale.  The dealer must then give the buyer the original or a copy of the used vehicle’s Buyers Guide at the time of sale. The Guide provides important information and notices to the buyer, including: whether the vehicle is being sold “as is” or with a warranty; the percentage of repair costs a dealer will pay under the warranty; a caution that spoken promises are difficult to enforce (and to get all promises in writing); a recommendation to keep the Buyers Guide for reference after the sale; a listing of the major mechanical and electrical systems on the car, including some of the major problems the buyer should look out for; and a recommendation that the buyer should ask to have the car inspected by an independent mechanic before buying the vehicle. The back of the Buyers Guide lists the name and address of the dealer, and should list the appropriate person at the dealership to contact if the buyer has problems or complaints after the sale.  If you buy a used car and the sales discussion and negotiations are conducted in Spanish, the dealer must let you see and keep a Spanish-language version of the Buyers Guide when you make the purchase.

*    Certificate of Title: Again, a vehicle’s Certificate of Title establishes legal ownership.  When you buy a used car that is already titled in another person’s name, the existing title is very important, because the seller must transfer legal ownership of the vehicle to you by transferring the title to your name.  The back side of the Certificate of Title has spaces for entering the transfer of ownership, which must be completed by the current owner (the seller) before they deliver it to you (the buyer).  The seller should give you the title at the time the vehicle is delivered, and you must then promptly apply for a new title in your name at the county tag office in the county where you will register the used car. When you purchase a used car from a dealership, however, the dealer must handle the transfer process and submit the application for a new title in your name along with the appropriate Ad Valorem Title Tax (TAVT) payment on your behalf.  As with a new car purchase, you will only receive the title if there are no liens or security interest holders listed on it.  So, for example, if you financed the used car through the dealership and a security interest was created when you made the financing agreement, you would not receive the title until you finish making the agreed upon payments.

Dealer Fraud and the Finance Company

Many times I get calls from consumers who know that their dealer has defrauded them my misrepresenting the car, or by selling a car without a valid passing emissions certificate, or by selling a car that has title issues and cannot be registered.  These folks are often faced by a finance company that financed the purchase of the car claiming that the dispute is between the consumer and the dealer and that the consumer has to pay the finance company anyway. This article is to provide information to the consumer on their defense.

Anytime that a consumer signs a retail installment sales contract at a dealer which is then assigned to the bank or finance company, the Federal Trade Commission has mandated that the contract contain the following language:

ANY HOLDER OF THIS CONSUMER CREDIT CONTRACT IS SUBJECT TO ALL CLAIMS AND DEFENSES WHICH THE DEBTOR COULD ASSERT AGAINST THE SELLER OF GOODS OR SERVICES OBTAINED PURSUANT HERETO OR WITH THE PROCEEDS HEREOF.  RECOVERY HEREUNDER BY THE DEBTOR SHALL NOT EXCEED AMOUNTS PAID BY THE DEBTOR HEREUNDER.

This language is mandated by Federal Trade Commission’s Rule on Preservation of Consumer Claims and Defenses, 16 C.F.R. §433. It is designed specifically to protect the consumer against this argument by the finance company/bank. What is means is that the consumer does not have to pay the bank/finance company if the consumer has a valid claim that the dealer committed fraud or breached the contract.

Georgia law also mandates that this language be present in all contracts for the finance of consumer goods. Ga. Ad. Code 122-5-.01.

For More Information on the FTC Anti Holder Rule Clause:

http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&rgn=div5&view=text&node=16:1.0.1.4.53&idno=16

https://www.google.com/search?q=ftc+holder+in+due+course&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a&channel=sb

http://www.ftc.gov/news-events/press-releases/2012/05/ftc-opinion-letter-affirms-consumers-rights-under-holder-rule

 

Fraudulent Use of a Carfax Report by Alpharetta Dealer Payless Auto Deals

I have posted previously about used car dealers’ use of Carfax to fraudulently sell a wrecked car as not having been wrecked. In this report I want to show an actual example of how this occurs.  I don’t usually name dealers in my articles but I am going to name this dealer.  Payless Auto Deals in Alpharetta, Georgia sold the consumer a car as a clean unwrecked car.  The dealer salesman told the consumer the car had not been wrecked on direct inquiry by the consumer.

Dealer provided Carfax

Auction Invoice only

The dealer bought the car at auction at which the car had an announced damage disclosure. The dealer used the lag time in the Carfax report to advertise that the car had no accident history.  More importantly, the dealer placed extremely fine print in its contract that “disclosed” the wreck history of the car.   The dealer claimed this fine print protected it from a law suit to recover for the deception.

This type of fraud happens more frequently than we ever want to think. The Canadian Broadcasting Company did a great report on this issue. Here is the link to the report:

http://www.cbc.ca/marketplace/episodes/2009-episodes/the-secret-history-of-cars

Protect Yourself  Carfax Report Fraud by a Car Dealer

You protect yourself from this by asking questions. Ask the dealer has the car ever been wrecked or damaged? Where did the car come from? Did your seller disclose any damage to you? Ask to see the auction invoice if it came from an auction. Ask to see the title to see if discloses any brands.

January 2, 2014 update

Today, when viewing Pay Less Auto deals web site, I located this car advertised there:
VIN #: 1HGCP2F64BA054755 Stock #: AA054755

They are showing this car as Carfax One Owner and No Known Accidents.

Autocheck shows:

11/09/2013 GA Auto Auction AUCTION ANNOUNCED AS UNIBODY DAMAGE

VIN #: WAULD64B23N002532   Stock #: AX002532 They are showing this car as

No Known Accidents
No Known Bodywork

Autocheck shows that it was announced at auction as:

 
07/14/2011 FORSYTH, GA   Police Report ACCIDENT REPORTED (Case #:201107000610)

 

If you believe you’re a victim of fraud by a car dealer, call our office today at 770-832-0300 or use our online form to request a free case evaluation.

 

NHTSA Issues Rule Allowing Consumers to Search Open Recalls

It’s official. NHTSA has issued the final rule. And the dealers who are fighting against legislation to stop them from selling unsafe recalled used cars to the public were wrong. Contrary to their claims, NHTSA opted not to create a single, centralized database, since the vast majority of auto manufacturers already make safety recall info available online, searchable by VIN, on their websites. The manufacturers argued, in their public comments, that requiring them to also submit the data to NHTSA would be redundant and inefficient, and NHTSA agreed. No centralized database is needed, in order for the public to have access to safety recall info in a timely fashion.

Here’s NHTSA’s news release, with a link to a pdf of the final rule at the bottom: http://www.nhtsa.gov/About+NHTSA/Press+Releases/NHTSA+to+Provide+Free+VIN+Searches+to+Help+Consumers+Check+Cars,+Light+Trucks+and+Motorcycles+for+Uncompleted+Recalls

Highlights of the rule:

  • Applies to all manufacturers who produce more than 25,000 or more light vehicles / year and manufacturers of 5,000 or more motorcycles
  • Builds on existing data that the vast majority of auto manufacturers are already providing to the public, searchable by VIN, via their own websites
  • Data has to go back at least 15 years from the date when the recall is issued
  • Manufacturers must update the data at least every 7 days, and include the date of the most recent update
  • Data must be available free of charge
  • Data must be searchable by VIN Hyper-links must be located on the home page of each manufacturer’s website

What this means to consumers — if you want to buy a car from a manufacturer like BMW that had refused to post safety recall info online, you won’t have to bother calling their toll-free number — you’ll be able to access the info online, assuming you have access to a computer and the internet. Otherwise, you can still find out by calling the manufacturer’s toll-free number or contacting a local dealer of that make.

If you believe you’re a victim of auto fraud by a dealer, call our office today at 770-832-0300 or use our online form to request a free case evaluation.

 

RV Buyers Beware-This is the message from a recent Federal Court case

A recent Georgia case demonstrates just how far RV manufacturers and RV dealers will go to insulate themselves from liability for warranty claims and other RV defects.

In this case the consumer bought the coach for approximately $200,000 from a Georgia dealer. At the closing, the consumers were never allowed to hold the documents. The documents were placed on a desk with a closer showing them where to sign.

Unknown to the consumers, there was a series of important disclaimers buried on the back of the document. These disclaimers state that the dealer makes no warranty whatsoever on the product; that if the coach has significant defects that cannot be repaired under the manufacturer’s warranty, which would otherwise entitle the consumer to rights under the uniform commercial code to revoke acceptance, the consumer cannot exert that right against the dealer.

The RV manufacturer is also hard at work disclaiming any responsibility to the consumer. Buried in the contract is a provision that says if there is a breach of warranty, the consumer’s sole remedy is to recover for the cost of repair or diminished value. You cannot recover for your damages, including rentals, travel, or other damages caused by your coach breaking down a thousand miles from home.

The federal court allowed this to occur despite the defect in the RV being unrepairable.

If you believe you’re a victim of consumer fraud, call our office today at 770-832-0300 or use our online form to request a free case evaluation.