384 Forest Avenue, Suite 17 in Laguna Beach, CA 92651
Dealership Fraud Lawyers in Los Angeles
There are many laws to protect consumers from auto dealership fraud. Below you will find short summaries of the protections offered under various laws. Get in touch with O’Connor Law in Los Angeles for quality representation.
Federal Odometer Act: This Act prohibits tampering with a vehicle’s odometer.
Magnuson-Moss Warranty Act: This Act is used when a supplier, warrantor, or contractor fails to comply with a written warranty, implied warranty, or service contract.
- For example, you can use this when a vehicle manufacturer does not honor a warranty or when a dealer does not honor a service contract.
State Repossession Laws: State repossession laws convey how a car should be repossessed.
- There cannot be a breach of the peace when the car is repossessed, meaning that the car repossession company cannot use physical force, threaten you, or remove your car from a locked garage without your permission.
- You may be able to buy back the car by paying the full amount you owe or even bidding on the car in the auction.
- In some states, you can get your car back if you reinstate your loan and pay repossession costs.
- The sale of the car must be done in a “commercially viable manner,” meaning that it is not sold for way below market value. This is important because you will be held accountable for the difference (deficiency) between the sale price and what you still owe on the loan.
- In some states, the creditor must tell you if they are keeping the car or are planning to put the car up for auction. If there is going to be an auction, they must tell you when and where the auction will take place.
State Lemon Laws: Lemon laws deal with cars that have been in the repair shop multiple times for the same substantial problem. Every state has its own lemon law. Each one is a slightly different. Some states (Colorado, Indiana, New Mexico, and North Dakota) have weak lemon laws and consumers may decide to pursue federal lemon laws instead. Learn more: U.S. Lemon Motor Vehicle Laws: What You Need to Know to Protect Yourself.
- For a substantial defect, the manufacturer should refund or replace a defective new car if it has not been fixed after four tries.
- For a safety defect, the manufacturer should refund or replace a defective new car if it has not been fixed after two tries or if the car is out of service for 30 days, within the first 12–18,000 miles/12–24 months.
Truth in Lending Act (TILA): Before a loan is processed, TILA requires that lenders disclose their interest rates and other information pertaining to the loan. TILA is supposed to help you shop for the best auto financing rate. A lender’s failure to provide this disclosure in a timely or accurate manner may provide you with a legal claim. Learn more about your TILA rights.
Unfair, Deceptive, or Abusive Acts or Practices (UDAP): UDAP protects you from unfair, false, or deceptive acts, including false advertising when you buy a product.
- Dealers, repair shops, or lenders cannot misrepresent information relating to the vehicle, such as not disclosing that the car had been previously wrecked or padding a bill of sale with unauthorized repairs.
Automotive Fraud, Dealer Fraud, and Repair Fraud
Odometer Fraud / Rollback Fraud – Altering an odometer, failing to report that an odometer has been changed or repaired or falsifying documentation regarding an odometer's mileage is against the law.
Rewritten Contract / Backdating – If a dealership asks you to sign a new contract, the date of the new contract may not be backdated to the date of the original contract, even if you sign an Acknowledgment of Rewritten Contract.
Undisclosed Flood Damage – Flood damage reduces a vehicle's value and over time corrodes the electrical system causing components and systems to eventually fail including safety features. Vehicle flood damage must be disclosed prior to a sale.
Undisclosed Previous Executive or Demonstrator Vehicle – Executive Vehicles and Demonstrators, sometimes referred to as a "Demo," "Brass Hat", or "Program" car must have the vehicle's prior use clearly and conspicuously disclosed.
Undisclosed Lemon Law Buyback – Vehicles that were repurchased by a manufacturer or dealership for any defect under the CA Lemon Law must be branded and disclosed as a "Lemon Law Buyback".
Undisclosed Gray Market Vehicle – Vehicles that were not manufactured for sale in the United States may not be covered by manufacturer's warranties and must be disclosed as a "Gray Market Vehicle" prior to being sold.
Contract Not in Language Negotiated – When a negotiation to purchase or lease a vehicle is primarily in the Spanish, Chinese, Tagalog, Vietnamese or Korean language, then the buyer of the vehicle is entitled to a translation of the contract and Buyer's Guide in the negotiated language prior to signing any agreements.
Payment Packing / Deal Packing – A dealer cannot quote a higher monthly payment than a vehicle sells or leases for, and then misrepresent an offer to add free or discounted items to a vehicle’s contract in order to keep the inflated profit.
Yo-Yo Financing / Spot Delivery Fraud / Conditional Delivery Scam – California dealer fraud occurs when a buyer is allowed to take possession of a vehicle after the dealer and buyer have agreed upon the terms of the vehicle's purchase or lease agreement including the down payment, bank rate, length of payments and an accepted trade-in, but later the dealership falsely claims that a lender is requesting that the terms of the contract need to change or that the buyer will have to return the vehicle.