Author: lfsuser

California Dealers Fraudulently Overcharging Vehicle License Fees

A vehicle purchase contract is a complicated document. Over two feet long with hundreds and hundreds of words printed on the front and back, it is nearly impossible for the average consumer to digest all this information. Because of this, unscrupulous dealers have been able to insert fraudulent terms and charges without the consumer finding out.

In its nearly 30 years of existence, Auto Fraud Legal Center has found numerous cases of auto fraud hidden in the maze of the lengthy sales contract. The latest auto fraud dealers are committing is grossly overcharging vehicle license fees. Read more to find out how one dealer charged a consumer nearly 50 times the actual license fees!

What Are License Fees?

License fees are one of the government fees collected during the sale of a vehicle in California. The California Department of Motor Vehicles (DMV) lists on its website that the vehicle license fee is essentially a property tax on vehicles. The license fees are due with the annual registration of vehicle, as well as anytime a vehicle is transferred. http://www.dmv.ca.gov/faq/faq_vlf.htm

The purchase of a new or a used vehicle from a California dealership is considered a “transfer.” This means that license fees may be owed at the time of the purchase.

How Are License Fees Calculated?

If you purchased your vehicle after July 1, 2011, the vehicle license fee is 0.65% of the value of the vehicle. This is a decrease from the previous rate of 1.15%. The value of the vehicle is generally the cash price of the vehicle, prior to any other fees, accessories, or other charges. On the standard California form contract, this price can be found on Line 1(A)1.

To calculate your license fee, you simply need to multiply the cash price of the vehicle by 0.65%. You can also use the California DMV’s calculator, found here. To use the DMV’s calculator, you need the vehicle’s VIN and license plate. This can be found on your registration card.

The Fraud After you have calculated your own vehicle license fees, check this amount against the fees the dealership charged you. Going back to your sales contract, you can find this amount on Line 2A. If you bought your vehicle from a reputable dealer, the amount should be the same or very close.

However, if you purchased a vehicle from an unscrupulous dealership, you may see a license fee that is double, triple, or even 10 times the amount that was actually paid to the dealership! Auto Fraud Legal Center is currently handling a case where the dealer paid the DMV $19 in license fees, but charged the customer $897! This is nearly 50 times the actual license fees paid!

While all cases may not be this terrible, we have found it is not uncommon for dealers to severely overcharge license fees. It is only one line on a document covered in numbers and words. Further, license fees are a government fee, so the dealer may blame “bureaucracy” for the amount of the fee.

How Auto Fraud Legal Center Can Help Our firm has spent nearly three decades devoted to fighting car dealers and manufacturers on behalf of consumers. Our trained attorneys will be happy to review your contract to determine if you were overcharged license fees, as well as to look for any of the over 50 auto fraud violations our firm has sued dealers over in the past. Many consumers contact our office for one problem, yet our experienced auto fraud attorneys are able to find many other problems the consumer did not know about.

For a free consultation with an auto fraud attorney, call (800) 466-5366 or fill out our web contact form.

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FTC Cracks Down on Auto Dealer’s Deceptive Practices

“Buying a car is a huge financial commitment, and people often calculate what they can pay down to the penny,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “They should be able to depend on the dealers to provide truthful information, and they can depend on the FTC to enforce consumer protection laws on the lot.”

More at: http://www.ftc.gov/opa/2013/09/autoads.shtm

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Predatory High Interest Car Title Loans Take Advantage of Consumers

In 2011, the most recent year for DBO data, Californians took out 38,148 auto title loans, averaging $3,500 each.

Auto-title loan ads populate the Internet and airwaves with catchy names like “INeedCashNow.net,” “PinkSlipLoan.com” or “123FundMe.com.”

Their pitch is typically the same: Get fast cash with no credit check, based on the value of your vehicle. Bad credit or bankruptcy? Not a problem. No long-term job history? No worries.

Consumers hand over their cars’ pink slips as collateral. If they default, their vehicle is repossessed and sold by the lender.

“The biggest problem is that you are putting such a valuable asset – your car – at risk. Particularly in California, where public transportation is not readily accessible, having a car isn’t a luxury,” said Maria Asturias, of the Center for Responsible Lending in Oakland. “It’s a necessity to keep your job, get kids to school, drive to medical apppointments.”
Read more here: http://www.sacbee.com/2013/08/25/5676395/personal-finance-high-rate-loans.html#storylink=cpy

Read More at: http://www.sacbee.com/2013/08/25/5676395/personal-finance-high-rate-loans.html

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Judge Who Ruled Against Arbitration Activist Now an Arbitrator

A former San Diego Superior Court judge who ruled against arbitration campaigner Jon Perz in his battle with a local car dealership has become an arbitrator.

Early on in the case, Denton ruled in favor of Mossy, which wanted to compel Perz to fight his suit within the arbitration system.

Then, in 2010, Perz sought to have the arbitrator assigned to his case dismissed after his attorney learned that she had sided with companies in 40 cases and never once ruled in favor of a consumer.

After the arbitration firm refused to dismiss the arbitrator, Perz appealed to Denton, who sided with Mossy again and said Perz must continue to battle the dealership in arbitration.

It’s not at all uncommon for retired judges to go into the lucrative field of private justice. But Perz said he was stung by the news that the judge in his case has essentially joined the team he’s been fighting against for years.

More at: http://voiceofsandiego.org/2013/08/12/judge-who-ruled-against-arbitration-activist-now-an-arbitrator/?utm_source=twitterfeed&utm_medium=twitter

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Car Dealers Lobbying Congress for Anti-Consumer Protections

The National Automobile Dealers Association is encouraging their members to lobby for the following anti-consumer changes in the law:

Preserving dealer-assisted financing: This refers to the way some dealers take your credit application and send it electronically to several potential lenders to see whether they want to give you a loan.

The Consumer Financial Protection Bureau says this could lead to uneven and discriminatory interest rates, because the size of the dealer reserve — its commission from the loan — can depend upon the interest rate the dealer cites for a customer. The CFPB has not proposed eliminating dealer reserve, but NADA says it wants to limit it to a flat fee rather than a rate that might rise or fall at the dealer’s discretion.

No LIFO repeal: LIFO refers to “last in, first out,” and is a form of inventory accounting that auto dealers like. . .The International Accounting Standards Board does not allow LIFO for financial accounting purposes, and President Barack Obama has said LIFO across all industries cheats the government out of tens of billions of dollars. Rental car recalls: Dealers are attempting to stop a bill that would require rental vehicles to have all manufacturer recalls performed prior to renting a vehicle.

http://www.cleveland.com/open/index.ssf/2013/08/car_dealers_see_congressional.html

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Sallie Mae Investigated for SCRA Violations

SALLIE MAE INVESTIGATED FOR SCRA VIOLATIONS – The loan servicer expected to be hit with an enforcement action by the Federal Deposit Insurance Corporation for violating the Servicemembers Civil Relief Act and the Equal Credit Opportunity Act, the company disclosed in a regulatory filing released Monday. The company could face monetary penalties and be forced to pay restitution as a result. The Servicemembers Civil Relief Act requires student loan servicers to lower interest rates on loans to 6 percent for active-duty members of the military if requested, and to apply the lower interest rate retroactively. The filing: http://1.usa.gov/12ZPIoe A Sallie Mae spokeswoman: “We’ve invested a lot in our compliance efforts but we understand some concerns persist, and we realize that the bar is getting higher. We will do what it takes to get this right under the enhanced standards of the new environment.”

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Consumer Financial Protection Bureau Surveying Consumers About Arbitration

“Just a few years ago, it was possible for consumers who’d been cheated by payday lenders to successfully pursue claims under consumer protection laws and recover substantial amounts of money wrongfully taken from them. But in the wake of recent U.S. Supreme Court decisions, courts are throwing out these cases and enforcing arbitration clauses even in cases where it’s been proven that the arbitration clauses guarantee that the consumers will not be able recover anything even if all of their legal claims are correct.” A few weeks ago, the Bureau took a new step in its study, announcing that it intends to conduct a survey of consumers. More at: http://publicjustice.net/blog/cfpb-surveying-consumers-see-what-if-anything-they-know-about-arbitration

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Picache v. Smythe European

Julie Picache has filed a lawsuit against Smythe European Mercedes Benz in San Jose. Ms. Picache purchased 2007
Mercedes-Benz R350 on December 11, 2011, by entering into the standard contact used by car dealerships. Under the terms of this contract, Smythe had ten days in which to notify Ms. Picache if it was unable to get financing for the contract. If Smythe did not notify her within that 10 day period, then the contract was binding on Smythe, and it was required to accept payments from Ms. Picache. Ms. Picache alleges in her lawsuit that Smythe did not notify her within 10 days of the contract that it was unable to get financing. Thus, Smythe was unable to cancel the contract.

Ms. Picache tried to go forward with the contract — even sending her first monthly payment to Smythe. But, Smythe refused to honor the contract. It sent a repossession company to Ms. Picache’s home who tried to back the car out of her garage while her two young children were in the back seat. Only after the police were called and Ms. Picache’s husband prevented the repossession agent from backing the car out of the garage was Ms. Picache able to get her children out of the car. Unfortunately, she was not able to prevent the car from being taken.

Greg Babbitt is handling the case for Auto Fraud Legal Center . If you have experienced a similar situation with Smythe European or any other dealership, please contact him at 858-348-1005 x104.

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Common Illegal Finance Department Practices

Dealers who tell customers: “We can’t get you financed unless you buy that $1,500 extended warranty.” Or GAP or etch or whatever.

Dealers who tell customers: “You don’t qualify for credit, but we can get you financed if your wife (or husband) signs with you.”

Dealers who tell customers: “Oh, that’s our Internet price for the car. It’s for good credit customers. Your credit’s lousy, so you’ll need to pay more for the car.”

Read more: http://www.autonews.com/article/20130515/FINANCE_AND_INSURANCE/130519947#ixzz2U3cAauFQ

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