Auto Sales & Financing Fraud 31


Alabama Auto Fraud Lawyer Judson E. Crump

(251)272-9148

It’s no secret that automobile dealers are some of the shadiest businesses around.  Unlike banks, they’re loosely regulated, less likely to have permanent locations, staff, and assets, and dominated by a profits-first mentality that not only tolerates ripping people off and lying to them, but actually encourages it.  To make matters worse, arbitration clauses are almost always upheld in auto sales contracts, so many of the worst offenses never see a jury.  But that doesn’t mean that when you’ve been screwed by a shady car dealer that you have to take it sitting down.  You can fight back, but you must be proactive.

Don't believe anything a car dealer tells you.  Read everything twice.  Ask for a copy of all documents before you sign them.

Don’t believe anything a car dealer tells you. Read everything twice. Ask for a copy of all documents before you sign them.

Auto fraud can take a number of forms:

  • “Spot Delivery” scams

You go car shopping.  You buy a car, sign the paperwork, and drive away in your new ride.  Then a few days, or a few weeks later, you get a call from the dealership.  They say that your financing didn’t go through and you have to bring the car back.  This can be illegal.  And they can never force you to agree to a higher payment than you’d originally bargained for.  And they CANNOT KEEP YOUR DOWN PAYMENT.

  • Inflated Purchase Price

You look at a car with a window sticker that shows a price of $10,000.  You negotiate to buy the vehicle, then after they run your credit, the price on the paperwork is suddenly $12,000.  This could be a hidden finance charge that violates the Truth in Lending Act.

  • Running your Credit without your permission

If you go to a dealership and they get your driver’s license and take it to a guy sitting at computer and then chat for a few minutes before letting you look at any actual vehicles, they may be checking your credit.  They can’t do that.  If you have not given them permission to run your credit report or actually applied for financing, then they cannot run your credit.

Yea they do.

Yea they do.

 

  • Denying your loan application without a written explanation

The Equal Credit Opportunity Act and the Fair Credit Reporting Act require that they notify you when you’ve been denied credit, and that they tell you why.  If the dealership handles more than 150 credit applications a year (only the tiniest dealers don’t), they have to give you a written explanation of why you were denied credit.

  • Falsifying your loan application

If you submit your financial info to apply for a car loan, and then later find out that the dealer had submitted different information, they’re committing bank fraud and violating the Credit Repair Organizations Act.

  • Not Giving You Clear Title When You’ve Paid them in Full

Perhaps the most painful form of car dealer fraud is when you’ve bought a vehicle, made payments for years, and finally paid everything off, only to find years later that the dealer who sold you the vehicle never owned it in the first place.  Yes, this actually happens.  In Alabama, once you’ve made your last payment, you have the right to request a title certificate.  They have 15 days to give it to you.

  • Selling Vehicles They Don’t Even Own

Believe it or not, this actually happens more often than you’d think.  In just the first few months of 2015, I took on three separate clients who signed sales contracts, made down payments or trade-ins, and thought they were buying a vehicle – only to find out months later that the car they’d been sold had not even been owned by the dealer at the time of the sale.  Sometimes there is a lien on the automobile that the dealer never paid off.  Other times, the dealer just flat-out doesn’t own the vehicle, and God only knows how it got onto their lot.  But as common sense dictates, you just can’t sell a vehicle that isn’t rightfully yours to begin with.  Unfortunately, this sort of scam happens every day to unsuspecting customers.

Here’s a video where I discuss some of the more common auto dealer schemes, frauds, and scams I’ve seen in the past year or so:


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31 thoughts on “Auto Sales & Financing Fraud

  • princess westry

    Hey there. I have been paying on a 2003 Toyota corolla sedan since 3/1/2014. The car was recently repossessed from my aunts property while I was visiting. I was 22 days behind on my payment. After contacting them to obtain the balance with fees for return of the property I was told to call back. Can a tow fee be charged, if the vehicle was driven off the property. I also reviewed my contract and found that I am being overcharged plus they deducted $370 in fees when I played a lump sum in Feb 2015. What can I do

    • Attorney Judson E Crump Post author

      Whether a repossession is lawful or not depends on the contract and how much time you were allowed to be late on payments. If they gave you a grace period and repossessed the car before it, then the repo was unlawful.

      One thing you should always do after a repossession is write a letter demanding a complete accounting of every dollar owed. In Alabama, they have to respond within 14 days.

      Good luck.

      • Srobinson

        Hi I purchase a car from a private dealer who bought the car from title max. Title max accidentally signed the front of the title which releases this lean off the car for the person who had a loan on it …this is a problem because now that person has to sighn the back of the title and im sure he wont sighn because that person got the car repoed from them ..which screws everything up the signatures on the back are all out of place and title max and the dealer are telling me there is nothing they can do. The dealer told me to sign for a abandoned title which is pretty much illegal I would think.

  • Twylia L. Allen

    I have an expensive history with Credit Acceptance and need to know if I have a chance to recover any of my payments and to have my credit report updated.

  • leigh sciandra

    my brother bought a car and b/c he couldnt’ get his boss to do work verufication they want the vehicle back and wont’ give him his $4000 down payment back he’s only had the car a week.. and they want there car and keep his money and his vehicle he traded and not give him anything back. is this legal?

  • Fatima Murray

    I purchase a 2006 Monte Carlo from Happy Cars in Gadsden, AL.and was financed through gofinancial.Today I went to the DMV to get a tag for the car I was told I didn’t have proper documentation. I called the dealer the phonebwas disconnected, I call the finance company the didn’t have any info for them. I took a ride back and the dealer was closed down with locks on the door. What do I need to do? Please help!

  • Taniquis Smith

    Hi there,
    I just recently financed a car 3 days ago. This is my first time doing this. Now I have been to the dealership and spoken with the owner numerous of times and they just told me when I get my money together come by and see them. The original agreement was $700 down with a total payout of 7999 on a Mazda bc there were some things on the car that needed to be fixed. I sent my child’s father to go take the payment and sign the contract. They gave him a hassle bc they wanted to sell the car to another couple but they did not have the money. He signed the contract and in the contract it specifically said that we had to bring them $600 in two weeks. He did not make us show any insurance at that point either. The contract we signed said we had 10 days to get full coverage insurance. Well the owner son was suppose to be washing the car but we recently found out that when he took the car to the back, he was trying to install a GPS tracking device. While doing so he managed to cut the wrong wires which made the radio and the window movers go out. Now we went back bc we both knew that all those things worked before the brother went in the back to supposedly wash the car. Now they have been calling for the last two days trying to get us back up there. They keep saying they want to fix the radio and do an oil change but the daughter slipped up today and said what they were actually trying to do was install al GPS device. Now I told the owner by his son screwing up my radio, that shows he is not certified and I do not want anyone who is not certified working on my car. I told them I was just going to go to the Mazda dealership and let them fix it. The owner said that I cant do that and that I have to come to them. He got so angry that he threatened to come tow my car just because I will not let them do the maintenance nor have I shown them proof of insurance. Is it legal to do that. I know in Alabama you are suppose to have insurance as soon as you leave off the lot, but in my contract that I signed with them it clearly states I have 10 days before they come do a repo.

  • malinda

    I purchased a 2013 Dodge Journey new and I have two sets of paper work which I found strange and I also had to return the first 2013 Dodge Journey they gave me at round tree and they gave me another one. I thought something wasn’t right but the car dealership kept saying they made a mistake and gave me the wrong car and that the VIN numbers didn’t match, but they did. I’m not sure what to do now because I found out today that I have a simple auto loan and Santander is allowed to charge me $16 dollars a day in interest on top of the 19.55% that I already pay. Is this legal? Why would Santander call me and say that they know I have an unrealistic amount of interest to pay and have I tried selling the SUV or refinancing the SUV. I just want to know what I can do or need to do?

  • Alisha Owens

    My son traded his car for a truck at a small local owed dealer.when his title didn’t come in after months he finally received a letter from Jackson ms.saying something was wrong with the paperwork. He went to our tag office today and they pulled info up that said the dealer had added themselves as a line holder and also added a co owner after she had give him the title app. So what does he do? He owes nothing on the truck it was an even trade and my mother called the woman and she doesn’t even know the man she put down as co owner or why she put his name on it. But she put all this on the title app after he left with the original title app.

    • Attorney Judson E Crump Post author

      That sounds like something fishy is going on. Give me a call at 251.272.9148 if you want to talk about it. Even if you don’t call a lawyer, you should order a title history from the state and a Carfax or Autocheck.

      -Judson

  • Jeremy Thomas

    We recently had our vehicle repossessed, once we went to get our belongings out of it, we noticed a 200.00 jacket was missing. No one seems to have seen it and we know that it was in the truck when it was taken. Is there anything we can do?

  • Micah Dean

    I need help with credit acceptance in the michigan area. I have had a dealership fraudulantly use my information to finance someone else vehicle through credit acceptance. They told me they didnt have a fraud package. then when we went to court they said they did. They never sent me the paper work and the court put a judgement against me. my telephone number is 313-638-0685

  • Jerome

    I got a car from a car lot in mobile an I only had the car 2 months an it has cranking an electrical problems I also had to replace the radiators an fans twice in 2 months an it continues to run hot and every time I call the dealership they give me the run around… So how should I go about this. Thanks in advance

    • Attorney Judson E Crump Post author

      Jerome,

      As crazy as it may seem, there is no implied warranty on used cars in Alabama. In most sales of goods, the law “implies” a warranty by the seller: meaning that if you buy something that doesn’t work, you can take it back for a refund. That’s been a basic premise of modern American commerce for decades. But with used cars, it doesn’t apply. So if all warranties have been disclaimed (like, if you bought a car “AS IS”), then there is no warranty, and once you take the car off the lot, the tires can fall off, and you won’t have any warranty claim.

      However, “AS-IS” doesn’t disclaim fraud, so if the dealer lied to you about something concrete and specific, then you may be able to pursue him for your losses. If you would like to discuss this, feel free to give me a call at 251.272.9148.

      JEC

  • Claire E Castro

    How do I go about getting out of this auto loan. Recently, my son moved from California back to Hawaii and was hired soon after his college graduation. He needed a car so we went to Aiona Car Sales. I chose the cheapest most reliable car on the lot. After a day, the salesman asked me to come in and sign some forms. We got the loan at Credit Acceptance and was the only lender he went to since I already have a car loan with my credit union. For a $6000, 2002 Subaru Forrester, which was only worth $2000, the payments was $280 per month. My son said he could pay it but ended up defaulting on the loan. They came to repo it soon after. Now credit acceptance is calling me everyday to ask me if I want to buy the car if I update my payments, then they start calling me to collect $9000 saying that it only sold for $900, the loan was $6000 and $9000 is what I owe because there were repairs that needed to be made and other costs in repo-ing the car! Not to mention, we had to do many repairs after purchase! I told them they can have $1500 because that is what the car is worth. The rep demanded that I make payment arrangements and pay it off when I get a tax return or something! The reason why the loan was made there is that my son did not have any credit and I couldn’t make another loan so why wouldn’t a company that wants to help people worsen the situation!

  • PClarke

    Hi, Judson.

    In January of 2014, I bought a 2012 Nissan Sentra from a local car dealership here in Mobile. The sticker price on the car was 11,900. After paying (close to) two years, today my payout is over 12,000. (I’ve been late twice in two years) My interest rate is 20%. At the time, my credit was shot. I was in need of a car, and when I went, the salesman gave me a choice of three cars and told me that was most likely the only place I could get a car. So, rushed and helpless, I bought it. Now I’m STUCK in this severely upside down loan. (KBB says the car is worth 7500-8000) I tried to refinance through my lender (Go Financial), and they told me they don’t refinance. When I went to my bank, they told me they could do nothing for me at this time either. I signed all the papers, so this burden is mine to carry. My question, however, is what are my options? Is there truly nothing I can do at this point but continue to pay way too much for this vehicle that isn’t worth what I’m paying for it?

  • Jane Doe

    I received a car thru credit acceptance in 2012 . i havent seen the car since 2013 and never recieved any papers on repo or anything until know when i asked for them in this civil suit. i had reported the car stolen. wat is the time period for them ti be able to sue. im not sure about the loan application or what the dealership put on it. and they also allowed me to make payments on my down payment but not to tell anyone

  • mike

    My girlfriend bought a car and financed it with B of A then drove it to Mexico and sold it to the Cartel. How much trouble is she in?

    • Attorney Judson E Crump Post author

      Mike,

      I can honestly say I’ve never encountered this issue. I can’t really give you clear advice because I don’t know what state you bought the car in. But generally, she could be liable for the entire amount of the debt civilly. And there may be criminal penalties as well. You need to talk to a local lawyer.

  • Joshua Brock

    I was very in need of a car two and a half years ago, and there was a very good prices van that looked nice for me and my kids and it was only 7900$ for a car with only 90,000 miles I thought that was our shot so they told me I at least needed 1000$ down on the car and on there website it said no credit check get pre approved, so I took the deal but a couple weeks ago after paying almost 500$ a month for two years it says I will be paying almost 35000$ for the car by the time I’m done, they forgot to tell me my financing rate was 26.6% I’m getting done wrong and everybody I talked to told me to get in touch with you that you could help I feel like I’ve already paid the car off and more please help me please I’m begging you!!

    • Attorney Judson E Crump Post author

      Joshua,

      What does the contract you signed when you bought the car say? In Alabama, if a salesman agrees to sell you a car for $10,000, but writes a contract for $20,000 and you sign the contract for $20,000, the contract you signed is the deal. So in order to know your options for dealing with this, you’ll have to start by looking at the contract.

      JEC