Georgia Consumer Fraud Attorney

Falsifying Credit Information is a Crime

We often see clients come in who we wonder how they qualified for the loan to buy the car. We have learned that it is because the dealer finance personnel provide false data to the finance company. I had a retired truck driver come in last month. His income consisted of about $1500 per month including a VA benefit.  He had been sold a $35,000 car. We called the finance company and learned that his application had been falsified and they said he made over $35,000 per year.  We told the finance company that he only made $1500 per month and showed them.  WE took back the car and the finance company let him out of the deal.

This article talks about this criminal activity.

Employees of the Serra dealership in Birmingham were federally indicted for this crime.

“As managers and salesmen in a car dealership, these defendants falsified customer information used to make loans, defrauding the banks who trusted the dealership to present truthful information during the vehicle financing process, and harming customers by fraudulently inflating the value of the vehicles they purchased,” she said. “This type of fraud is the auto-industry equivalent of the mortgage fraud that contributed to the financial meltdown, and could threaten the security of our financial markets,” Vance said.

“Today’s arrest clearly illustrates that individuals who engage in these types of illegal activities will be held accountable for their actions,” Hyman-Pillot said. “These defendants clearly took advantage of the people in their community, as well as financial institutions. They manipulated the system and falsified documents with the intention of increasing profits at the expense of others.”

“This case is significant to the FBI not merely because of the loss amounts, but also because of the many victims left in the wake of this scheme who had trusted the defendants with handling their vehicle financing,” Schwein said

The 11-count indictment charges the defendants with conspiring with others at the dealership, between August 2010 and October 2013, to defraud financial institutions, Nissan North America and Serra Nissan customers by fraudulently increasing vehicle sales in order to boost personal profits.

The indictment also charges Wilkinson, Burton, Perry and Riley with bank fraud for fraudulent loan information submitted to financial institutions in October 2012. Defendants Wilkinson, Perry and Henderson also are charged with wire fraud for fraudulent information submitted to automotive financing companies such as Nissan Motor Acceptance Corporation and Santander Consumer USA.

How do you avoid this? Well make sure you give accurate information to the dealer. Ask to see the credit application filled out before you sign it. Don’t let there be blanks for your income. Do not agree to providing false income information. That is a crime. Contact the finance company once approved to verify the information.  Be suspicious if you are being sold more car than you thought you could afford.

Emissions Victory vs. Chair of GIADA

In a recent case T. Michael Flinn represented a consumer in a claim against the dealership owned by chairman of the Georgia Independent Automobile Dealer’s Association.  The consumer visited the lot and located a car and contracted to buy same. While she waited for what they told her was their obtaining another key on her behalf, they took the car to get it emissions tested. It failed. They did not tell her. They allowed her to leave the lot with the car which broke down on the way home. She brought the car back, and asked for a refund of her payment.  The dealer refused. She asked for a replacement car. The dealer refused. The dealer did offer to repair the car. Faced with the dealer’s refusal to refund the money, and without the ability to buy another car somewhere else, the consumer took the car back after repair. The check engine light immediately illuminated again. The care failed another emissions test and the consumer again asked for a refund. The dealer said “no” and pointed to the “as is” clause.

If the “Check Engine” light is illuminated on a 1996 or newer model year vehicle, the vehicle will fail the emission inspection. An emission-related problem has been detected by the vehicle’s on-board diagnostic (OBD) computer and it must be repaired before the vehicle will pass the emission inspection. If the “Check Engine” light is illuminated, the OBD computer will indicate the general area of failure. A diagnostic analysis should be obtained by a qualified repair facility prior to making any repairs. Georgia Clean Air Force Publication.

According to Georgia law, sellers of gasoline-powered cars and light-duty trucks (8,500 pounds gross vehicle weight rating [GVWR] or less) located within the 13-county testing area, regardless if they are a private party, dealership or auctioneer, must sell a vehicle with a current, valid passing Georgia Vehicle Emissions Inspection Report (VIR) if the buyer is going to register the vehicle in one of the 13 metro Atlanta counties: Cherokee, Clayton, Cobb, Coweta, DeKalb, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Paulding or Rockdale. Georgia Clean Air Force Publication.

Here, the dealer did not obtain a valid passing emissions certificate and broke the law, regulations for used car dealers, and the Code of Ethics for his own Association.

The case was required to be heard by an arbitrator because the dealer had her sign an arbitration agreement without explaining to her what it meant. (Click here for why you should never sign an arbitration agreement). The arbitrator did award the consumer all the money she had paid on the car but did not find the conduct reprehensible enough to award punitive damages or treble damages.  The arbitrator also awarded attorney’s fees.

No Surprise that ‘Auto Complaints’ Tops List of Consumer Complaints

Georgia Office of Consumer Protection Administrator John Sours sent this article listing the most complained of consumer complaints.  The article was based upon surveys conducted by the Consumer Federation and surveyed general-purpose consumer protection agencies at the city, county and state level about the top, worst, and fastest-growing complaints in 2013. The survey also asked about new kinds of problems that consumers reported, the agencies’ biggest achievements and challenges, and new laws needed to better protect consumers.  Number 1 on the list was Auto Complaints.

 

  • Auto: Misrepresentations in advertising or sales of new and used cars, lemons, faulty repairs, leasing and towing disputes.

This comes as no surprise to us here at georgiaconsumerlawyer.com.  The methods of fraud and deception used by the used car industry are as broad as man’s imagination.  We are seeing new and evolving methods of fraud like those mentioned on this web page including emissions issues daily.

 

Watch out for “Non Emissions Waivers”

Don’t let them fool you.  This is basically just a way for the dealer to get a bad car off his hands and try to make a quick buck hoping nobody will notice.

I have recently filed four lawsuits against the same car dealer, Loving Care Cars of Atlanta, Georgia for selling cars without a current and valid passing Georgia Vehicle Emission Inspection Report (VIR).

When a dealer sells a car, it may be required have to have a passing VIR depending on where you live.  There are thirteen Clean Air Force covered counties in the metro Atlanta area (Cherokee, Clayton, Cobb, Coweta, DeKalb, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Paulding or Rockdale).  And if you live in one of these counties, a dealer must have a passing VIR on the vehicle before the purchase.

391-3-20-.18 Sale of Vehicles. Amended.

(1) No person shall sell any responsible motor vehicle, as defined by the Act, intended for highway use without a currently valid passing Certificate of Emission Inspection, as required under this Chapter, if the purchaser is required to register the vehicle in any covered county. Any person violating this Rule shall be guilty of a misdemeanor.

One way Loving Care Cars tried to get around this Georgia law was by getting the buyers to sign a “Non Emissions Waiver.”  This form stated that the buyer would not register the vehicle in an emissions-covered county.  And if the buyer decided to register it, he/she would get repairs to bring the car to pass emissions and not hold the dealer responsible.  This was despite other documents that provided that the car was going to registered in a clean air county.

This powerless waiver has been specifically disallowed by the Clear Air Force.  Whether or not the buyer signs this, it is still illegal for a dealer to sell you a car that does not pass emissions testing.  And above all, you will not be able to register the vehicle if you live in one of the clean air counties above.

You can check the Georgia Vehicle Inspection Report (VIR) by submitting the VIN of the car at:  http://www.cleanairforce.com/motorists/emissions-testing/vir-reprints/

 

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.