Certified Pre-Owned Vehicle Programs Sometimes Cover Past Wrecks. Beware of Trusting the “Certified” Label.
When you’re looking to purchase a car, all you want is a reliable, comfortable car that you can afford. If you either cannot or will not spend the money to buy a brand new vehicle, then a used car is your only choice. Certified Pre-Owned Vehicles can be a decent option, if you’re dealing with a manufacturer who stands behind their certification and do your diligence ahead of time.
But many times, the certified label is nothing more than a fancy sticker used to raise the price of the car. Some manufacturers have even been known to repaint wrecked cars and then push them through their “certified” process. Or more commonly, allow dishonest dealer sales personnel to conduct the “certification” and simply rubber stamp the dealer’s certification.
If you paid certified-car money for a vehicle that was previously wrecked or used as a daily rent-a-car, you should talk to your lawyer about your options for getting your money back.
If you live in Alabama and would like a free consultation regarding your rights with certified pre-owned vehicles, call us at 251.272.9148 today.
“My Trade-In Vehicle wasn’t paid off by the Dealer. Now it’s still on my credit report as past due. What can I do?” Believe it or not, this question comes up fairly often. You go car shopping, and you find a car you like, negotiate a value for your trade-in […]
If you have had a vehicle repossessed recently and the repo man or towing company refuses to let you access your vehicle, they have to give you your property back. This means they must either mail it to you or give you a chance to come and get it. But […]
If someone owes you money, you cannot wait forever to take them to court. The law places a time limit on every lawsuit. It’s called the Statute of Limitations. And the Statutes of Limitation exist for good reasons. Evidence gets lost. Memories fade. People move on with their lives. Business would […]
Whenever you Apply for Credit or any sort of Installment Loan, you are supposed to receive a written notice from the creditor telling you if you were approved, denied, or given a counter-offer. This is more important than you think. Here’s why.
There’s this thing called the Adverse Action Notice. It’s a letter that anyone who receives a consumer credit application must send to the applicant if they do anything but approve their application on the terms requested. Here’s what they look like:
This one complies with FCRA and ECOA – it tells the applicant that he doesn’t have enough credit history to get approved for the loan he wanted.
This letter was sent to a client who had no idea that she’d ever applied for a loan with Cap One. She went with another finance company because the car dealer didn’t tell her about Cap One’s offer.
Both the Equal Credit Opportunity Act (ECOA) and the Fair Credit Reporting Act require adverse action notices, but the same letter can serve both purposes, and the ECOA requirements are more important.
Just like the name says, the Equal Credit Opportunity Act was originally intended to prevent credit discrimination by forcing creditors to tell people the real reason why they were denied a loan or offered a 12% interest rate when everybody else got a 7% interest rate. It’s really hard to discriminate against divorcees or blacks if you’re not allowed to just deny without an explanation. It still does this, though I like to think that our society has progressed beyond the point of people being mistreated solely because of their color, sex, religion, or whatever.
But the Adverse Action Notice has two very important functions that Congress probably didn’t foresee back in 1974.
1. It alerts you to problems with your credit report. Because the adverse action notice has to tell you why you were denied, (i.e. “You have too much debt already.”), it can alert you to credit problems that you didn’t know you had. For instance, if you get a denial letter that says your auto loan application was denied because you had “Too many recent inquiries,” and you know for a fact that you haven’t applied for any sort of credit in 2 years, then you know that something is wrong, and you’ve been alerted to a possible identity theft issue that you need to take care of ASAP.
2. It warns you of fraud by potential creditors and salespeople. This happens most often in the context of auto sales, but it can just as easily happen with mortgage lending (where there are much bigger consequences). How? I’ll use an example to show you why. You go to a car dealer shopping for a car. You pick one or two models you’re interested in and you offer a $3,000 down payment and you ask to finance the remaining $18,000 at 8% APR over 48 months. You fill out a credit application and you hand it to the dealer. He uploads it to his computer system and submits the loan to potential finance companies.
What’s supposedto happen next is this: he sends your application to a four potential lenders, and they respond. Whichever one gives you the best deal gets the contract. You get the car. The dealer sells a car. The finance company gets a new customer paying them 8% APR for their loan.
But what can(and sometimes does) happen is this: three lenders reply, two of them offer you financing at 9%, and the other offers you financing at 12%, but is willing to finance a bunch of junk charges like a $1800 service contract that cost the dealer $600 and pay the dealer a bonus $500 for sending you their way. The dealer then tells you that you’ve been approved for 12%, and that’s all they can do. You believe him and you take the deal.
30 days later, you get two letters from finance companies you never heard of, announcing that they got your applications, but only offered you 9%, and that they haven’t heard from you since then. You think WTH? I signed up for 12% when I could have gotten 9%? So now you know you’ve been screwed. That’s what is supposed to happen. Now you can do something about it. Like calling a lawyer in Alabama who can help you take action to defend your rights.
Default Judgment Vacated for Fraud & Misrepresentation
This case was a particularly important one, in my opinion. I’ve written before about cases where I was able to reverse a default judgment after it had been entered because the Defendant was never served with the complaint. That is by far the most common way to reverse a default. But not the only way.
My client bought a car in 2007. It had a 24% APR and she reliably made her payments for about four years. Then the car broke down and since it was sold to her “AS IS – No Warranty,” she had to pay for the repairs out of pocket. The repairs would have cost $4,000. The car wasn’t even worth that much. So she gave it back to the finance company – Credit Acceptance Corp.
Three years go by. She gets sued by Credit Acceptance – they say the balance on the loan is $11,071.61. She calls the collection lawyer to try and make payment arrangements, but they wouldn’t accept any offer she could afford.
So she didn’t answer within the 30 days allowed by Alabama law. Credit Acceptance moves for a default judgment. They knew that they were in the superior position – my client hadn’t defended herself, so they were going to get a judgment without having to really prove their case. That’s how default judgments work.
But when the judgment was entered, it was not for the $11,071 she’d been sued for, but for over $19,000! How? They had asked for interest at 24% APR beginning January 1, 2012.
But the car hadn’t even been sold at a post-repo auction until July 2013! You can’t calculate a deficiency balance until you have sold the car. It just isn’t possible.
So how did a judgment get entered that was so obviously wrong? Because Credit Acceptance had one of their employees file a false affidavit with the court. Their affidavit stated that the amount owed on New Year’s Day 2012 was $11,071.61, when in fact that was the highest amount the debt could have been in July of 2013! So that is 19 months of interest (at 24% interest!) that they had no right to claim, yet in a sworn affidavit, they were seeking. In other words, Credit Acceptance blatantly lied to the court to try to steal over $4,200 from my client.
I filed a motion to set this judgment aside, and it was granted. Even the collection lawyer, to his credit, realized that something was way off with the affidavit.
Spot Delivery Sales are Often Illegal. But even when they’re not, you still have rights. If you have credit problems in your past, then there is a chance you have been subject to a spot delivery auto sale scheme. Spot Delivery? What is spot delivery? A spot delivery is […]
Koons Buick Pontiac GMC v. Nigh – 543 U.S. 50 (2004). Proof that Judges aren’t just partisans. The U.S. Supreme Court now has 5 “Republicans” and 4 “Democrats.” Since I get my knowledge of the world from the TV Channels or internet news sites that disagree with me the least, […]
Last year, the Consumer Financial Protection Bureau decided to finally get around to regulating sketchy car dealers and other non-bank arrangers of consumer financing. Why? Because as everyone who deals with auto dealers and their financing partners knows, car dealers very often conceal important facts from the people they deal […]