Philadelphia Pennsylvania Consumer Protection Blog

Used car dealer facing federal fraud charges

Used car dealers in Pennsylvania can be fined or lose their business licenses for violating the state's consumer protection laws, and they may also face federal prosecutions when their illegal behavior is orchestrated using wire communications or conducted over state lines. This is the predicament that a former used car dealer in Wisconsin recently found himself in. The man was originally being investigated for fraud by the Brown County Sheriff's Office, but U.S. attorneys became involved when the scope of his activities became clear.

The man was charged with multiple counts of bank, wire and mail fraud following a three-year state and federal investigation. Prosecutors claim that he found his victims by offering to sell on consignment cars that had been advertised on Craigslist. The man is said to have then sold the vehicles without informing or paying the owners. He is also alleged to have produced counterfeit titles so that vehicle buyers could obtain bank loans.

Was your auto loan really approved before you left the dealer?

You should feel excitement when you purchase a vehicle. But you know that it involves some back and forth with the salesperson. Unless you pay cash for the vehicle, you will also have to deal with the financing department.

A good bit of the auto-buying experience feels like a game of tug of war, especially if you receive financing through the dealership. More than likely, you decided ahead of time how much of a down payment you could make, how much you were willing to pay a month and just how much vehicle you could afford. By the time you finished "negotiating" with everyone at the dealership, you felt satisfied and left with a vehicle and an auto loan.

Consumer-friendly lemon laws vary from state to state

A study ranking state lemon laws showed that Pennsylvania came in at 35. This may be interesting to consumers, especially since new vehicles cost about $36,000. With this amount of money on the line, consumers want to feel confident that they are able to return a vehicle that has major issues without being put through a frustrating process.

A defective car may produce problem after problem and can be compared to a nightmare that just won't go away. A lemon vehicle has been defined by some as a new vehicle that has manufacturing or design defects that impact the value of the vehicle or its safety. These defects usually cannot be repaired by the manufacturer.

Debt collectors may violate the law

Many Philadelphia consumers struggle to make ends meet. If they are unable to pay credit card bills or loans on time, they may face calls and letters from debt collectors. Collection agencies can be very aggressive in seeking payment. In 2017 alone, 70 million people across the United States had some kind of contact with a debt collector, reported the Consumer Finance Protection Bureau and the National Consumer Law Center. Around one-third of all American adults with credit of any kind also had some kind of debt in collection.

Each year, consumers across the country receive around 1 billion calls from debt collectors. These calls are a major source of complaints about unethical behavior and even fraud. It is important for consumers to know that they have rights when they deal with collection agencies. In 2010, Congress re-enacted the Fair Debt Collection Practices Act, prohibiting certain types of harassing behavior on the part of debt collectors. They are forbidden from calling at certain hours or above a specified number of times. In addition, debt collectors may not notify family members or employers about the debt. When collection agencies break the law, victims can sue for damages as well as fees.

Is your car title clean, or has the dealer washed it?

If you know a little about cars, you have an advantage when you go searching for a reliable used vehicle. You may know what to look for under the hood and on the dashboard, and you may recognize when it is better to walk away from a vehicle. Even armed with this information, you may not fully know what you are getting when you make your purchase.

Most consumers shopping for used cars do not have the savvy or know-how to examine the engine and other parts for defects, so they have to rely on the integrity of the dealer. Unfortunately, car dealers are typically looking out for their own bottom lines, meeting their quotas and clearing lemons from their lots.

What consumers can do about auto dealer fraud

In Pennsylvania and across the United States, victims of auto dealer fraud and misrepresentation can take action to protect their legal rights. Consumers can take three different steps: contacting the dealer in writing; filing a legal complaint with the appropriate state agency or district attorney's office; and seeking legal advice from a lawyer. The first thing to do when faced with car dealer fraud is to ask the dealer to correct the situation. Contacting the dealer before filing a legal claim is mandatory in many states.

A person can either contact the dealer directly or hire an attorney to act on their behalf. One stipulation is to put the query in writing. A letter of explanation should explain the exact misrepresentation and steps the dealer can take to solve the situation favorably. For instance, the consumer may have purchased a vehicle under pretenses. The dealer may not have disclosed important financial fees to the purchaser. In this scenario, a letter should explain that the consumer expects to receive reimbursement for fraudulent charges.

How to avoid buying flood-damaged vehicles

Each year, thousands of cars are damaged by hurricanes and floods across the U.S. While many of these vehicles are totaled and destroyed after their owners receive their insurance settlement, a significant portion are resold at used car lots and auto auctions in Pennsylvania and across the country. Worse, some sellers attempt to hide a vehicle's flood history from potential buyers.

According to consumer advocates, there are a number of ways car buyers can protect themselves from such scams. First, buyers should always purchase a car's vehicle history report and title to make sure it hasn't been flagged as "flood damaged." Next, they should carefully inspect the car's interior and trunk to see if there are any signs of water damage, such as rust, mud, mold, mildew and water stains. They should also check the gauges for any signs of water damage and test all electronics to ensure they're working.

HB-26 would extend lemon law protections to motorcycles

The Pennsylvania Automobile Lemon Law provides consumers with legal remedies if they purchase unsafe or defective new cars, but the legislation does not apply to new motorcycles. Rep. Pam Snyder thinks that this situation needs to be addressed, and she has co-sponsored a bill that would give motorcyclists in Pennsylvania the same legal protections that drivers enjoy.

Snyder points out in a co-sponsorship memo that modern motorcycles are sophisticated machines that can be expensive. Motorcyclists in Pennsylvania would be able to seek a refund or a replacement in certain situations if House Bill 26 is passed by the legislature and signed into law. The existing lemon law provides these remedies if dealers are not able to adequately repair or remedy a defect that substantially impairs a vehicle's safety or value during the first 12 months or 12,000 miles of ownership.

Will an auto dealership really pay off your current car loan?

If you had the chance to lower your car payment, would you take it? Probably. Who wouldn't want to save some money and have a great car too?

The problem is that the remainder on your current auto loan is more than dealerships are telling you its worth. Enter the dealership who promises to pay off what you owe on your current vehicle regardless of how much it is.

Protecting your credit history

Many people living in Pennsylvania and around the country are not aware of how their credit score and history can impact their day-to-day lives. Credit card companies, bank lenders, insurance companies, employers and landlords regularly check credit scores before deciding to work with an applicant.

Unfortunately, many people are unaware of negative information on their credit reports. You may have had the experience of attempting to apply for an apartment, a credit card or a job only to be informed that you have been disqualified because of your credit.

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