Auto Sales Fraud

There are many ways a transaction to purchase a vehicle may go wrong. State and federal laws regulate information which must be disclosed to a buyer and how the transaction should be documented.  Other possible violations in connection with a car purchase may include:

Errors in Odometer disclosure

Federal law requires car dealers to disclose to a buyer the mileage for each vehicle sold. A car dealer should show you the actual title with the mileage listing. If a car dealer makes a representation in an advertisement about the mileage on a vehicle and you find out later that the mileage was wrong, you may have a claim for violation of the odometer law.

Undisclosed wreck or damage

Failure of a dealer to disclose adverse history of a vehicle, including salvage or branded title history, flood damage, that it was previously stolen, used as a rental vehicle, air bags were removed, or of its inability to pass state inspection, are among some possible violations.

Failure to deliver title

State law requires a car dealer or finance company to register the title to a purchaser within 20 days of the purchase. Failure to do so subjects them to liability under dealer licensing laws and, if title is not conveyed, to civil liability to a buyer. It is a deceptive trade practice to sell a car to which you do not have title.

Breach of warranty

Very common in third party warranty or service companies

Wrongful Repossession

If you are maintaining the terms of your retail installment contract with regard to the purchase of your vehicle and your vehicle is repossessed, you may have a claim against the finance company or bank. Even if you were in default of the contract, you may have a claim if the finance company or bank did not comply with the laws which apply to repossessions. Although Texas law and most retail installment contracts allow for finance companies or banks to repossess vehicles, they must do so without violence, without breaching the peace and without breaking into a building.

After your vehicle is repossessed, the finance company or bank is required to send you a notice telling you what they intend to do with your vehicle. The letter must say whether they intend to sell it via either a public or private sale, when the sale will occur, and state the amount of the deficiency. If no such letter is sent, you may be able to prevent the finance company or bank from obtaining a judgment for a deficiency and you may have a claim against the finance company or bank for their failure to follow the law.

If the finance company or bank files suit against you to recover the deficiency on an auto loan, they must prove that all aspects of the disposition of your vehicle were conducted in a commercially reasonable manner. You must assert this possibility as an affirmative defense in your response to the lawsuit. It is best to hire an experienced consumer lawyer to defend you in such a case and to evaluate all possible options, including defenses and potential affirmative claims.

Failure to honor sales contract

Commonly known as Yo-yo sales, it happens when a consumer buys and takes possession of a vehicle on the spot. Car dealer assures the consumer the deal is final, go drive your new car. Sometime later, the consumer is told the deal fell through, additional money needs to be paid, higher interest rate paid or a different car purchased. The car dealer believes if the consumer has become attached to the car by this time he will be more willing to agree to paying more in order to keep the car. If you have a completed contract however, you may be able to enforce it according to the written terms.

When Buying a Car, remember: 

  • Do not sign a blank contract.
  • Get a copy of each and every document you sign, on the same day, right after signing.
  • Make sure the contract is signed by a dealer representative
  • READ the contract before you sign, especially the financial terms.
  • Check to see if you are being charged for add on products such as fabric guard, window etching, desert protection, rust proofing, credit insurance. Many of these services provide little in value to the consumer but are profit centers for the dealer. Don’t let the dealer convince you any of these products are required.
  • Do not keep your only copy of your sales documents in the glove box of your car; keep an additional copy separate from your car.
  • Do not rely on a Carfax report. Carfax does not have a comprehensive database and often does not have up to date information

Servicemembers Civil Relief Act

We are all aware of the tremendous sacrifices made by the men and women who wear the uniform of the United States Military, especially when deployed overseas. Many protections are provided to servicemembers in how their obligations are handled while serving. I have assisted servicemembers in disputes with creditors who have not complied with the law and in obtaining relief from the violations.

I have practiced law for twenty five years and as a solo practitioner concentrating on consumer law matters since 1994. I have handled claims in state and federal courts for a wide variety of matters, obtaining relief and remedies for consumers. The cases I have handled include violations of state laws, federal laws and common law causes of action. As a true solo practitioner, I take a hands-on approach in dealing personally with my clients, evaluating their options and keeping them informed of the progress of their case. Many of the claims which can be brought also allow for the recovery of reasonable attorney fees.