The Car Lawyer

The Car Lawyer At Louis A. Liberty, Attorney at Law we are committed to providing steadfast guidance, quality advice, and superior service

Our firm is comprised of experienced, skilled, committed, and highly regarded attorneys who seek to achieve their clients goals in an efficient and prompt manner. Our experience and dedication has aided us in successfully resolving auto fraud cases with great commitment, integrity, and reliability. We are committed to protecting you against deceptive and unsavory practices of car dealers. The many

perplexing forms of auto fraud include contract confusion, false advertisement, odometer fraud, non-disclosure of vehicle history, financial fraud, negative equity/trade in fraud, etc. Since many of these types of auto fraud can leave an average consumer bewildered, we want to make sure you get justice!

06/04/2015

Bought a car and gave dealer a hold check for your down payment? Probably illegal and entitles you to cancel the contract and get refund!

11/30/2013

Trading in your car and you owe money on it? Be prepared to get ripped off.

The typical dealer will add a 10-day payoff meaning he will add ten days of interest to your payoff thereby charging you for his carrying costs.

Let's look at your trade in lien payoff:

On must distinguish between a consumer asking for a payoff and a dealer asking for a payoff. A consumer who is quoted a payoff has the luxury to decide if she wishes to pay this amount immediately, or allow interest charges to accrue. In that instance, a 10 day payoff quote, while technically unfair as some would interpret that as a grace period, without a contemporaneous disclosure that interest or finance charges would continue to accumulate during this ten day period. A decision to pay immediately, even if the quote was a 10 day payoff, would result in a refund of excess finance charges. The scenario is completely different when one puts an automobile dealer in the middle.

When a dealer takes a vehicle in on trade (Trade-in), as part of the down payment, the dealer is purchasing the trade-in that day. Historically and without even asking the consumer, the dealer calls a trade-in lien holder and ask for a 10 day payoff and inserts that amount on the RISC as the "prior credit or lease balance". This means even though finance charges are beginning to accrue on Day 1 for Vehicle 1 ( the newly acquired vehicle) finance charges are continuing to accrue on the Trade-in for 10 days. This is hardly fair for the consumer.

The NEW 15-20 day payoff

What is most egregious is the hidden reason for the 15 and 20 day payoffs that have become pervasive in the last 3 years. As a result of the financial crisis of 2008, many dealers went out of business. On their way out, many took trade-in vehicles and failed to pay off the trade-in lien leaving thousands of Californians with two car payments despite having sold their trade-ins to the dealers.

In 2008, the California legislature created the Consumer Motor Vehicle Recovery Corporation to compensate these consumers funded by a $1.00 DMV fee for every car sold in California. In 2010 added Vehicle Code §11709.4. requiring dealers to pay off the trade-in lien within 21 days from the date the vehicle is traded in and prohibit the dealer from selling, or transferring ownership until the trade in is paid off.

Instead of asking for the common, yet illegal 10 day payoff, some unscrupulous and inefficient dealers began asking trade-in lien holders for 15 and 20 day payoffs as they misread the new law to allow for charging consumers for finance charges on trade-in liens for up to 20 days. Did the finance companies comply? Of course, they readily quoted 10, 15, and 20 day payoffs to these dealers and in order to make it even easier, changed their own policies of quoting 10 day payoffs to 15 day payoffs as standard. Some, like Westlake and Wells Fargo refuse to quote a same day payoff with a per diem amount for a consumer to decide when and how much to pay, and will only quote a 15 day payoff.

08/21/2013

The Call Back from the Dealer

“We are having trouble getting your loan approved” or “The bank requires you to sign more papers.”

There are many reasons for the call back. Most often, the dealer has overcharged you for the car, and the contract price exceeds the guidelines of that bank. This is a scary proposition, because most banks will buy a contract with a sale price of up to 130% of fair market value and this does NOT INCLUDE extras such as service contracts. If you have exceptionally good credit, there is no cap and a bank could approve a contract of 200% of Fair Market Value.

This sometimes happens when a consumer trades in another car with lots of negative equity that is rolled into the new RISC.
A second reason for the call back, is that the dealer KNEW he could not sell the RISC at that rate or amount financed, and PLANNED to call you back in a few days after you had shown all your friends your new car. That way, you would sign ANYTHING to avoid telling your friends and family members you did not qualify for automobile financing.

So, if your dealer tells you the bank requires you to return and sign a new contract, he is lying. They all do it. They do not want you to know what is really going on. The most often-used lie is, “The bank requires a larger down payment.” This will help to bring the amount financed into line with the bank’s guidelines.

When you get this call, the dealer is notifying you he cannot get a financial institution to purchase your RISC and he is opting to cancel the contract. Let him know you know your rights, you are returning the vehicle and you want your down payment and trade-in vehicle back immediately. YOU are now in the driver’s seat.

The dealer does not want to lose this deal. If you are a good negotiator, this is the time to put it to the dealer. The dealer may then lower the price of the vehicle (not to help you, but to bring the amount financed within a bank’s guidelines.) But at this point the dealer already has tried to rip you off. You need not sign a new RISC no matter what the dealer says.

Liberty and Associates APLC
Tel # (650) 341-0300

08/06/2013

Liberty and Associates, A PLC Attorney at Law
Questions we commonly answer.

What will your services cost me?

Nothing! We take all of our cases on a contingency basis – meaning we do not charge you directly. The dealer or the bank pays our fees. If we collect nothing, you owe us nothing.

The legal response is: at the end of the case – either through
settlement or judgment, your damages include your attorney’s fees and costs. So, these funds are owed to you. You then pay us from these funds. For example, you are entitled to return the $10,000.00 car and receive $10,000.00. We negotiate a settlement for $15,000.00 which includes the $5,000.00 for attorney’s fees.
In most cases, we do not take a percentage of recovery so you get all the damages you are entitled to, and an additional recovery of your attorney’s fees.

08/06/2013

At Liberty & Associates, a PLC , Attorney at Law our practice is focused on Auto Dealer Finance Fraud – mostly under the Automobiles Sales Finance Act known as Rees-Levering.

We sue car dealers and banks that hold the contracts. Most clients contact us to complain of minor issues and we uncover fraud that the typical consumer is unaware.

The fraud includes charges for items not provided; failing to get the advertised price; packing payments; failing to disclose vehicle condition; forgery; backdating contracts; and, failing to comply with consumer protection laws.

We also defend consumers post repossession against the banks that purchased the sales contract.

We are committed to uncovering deceptive and unsavory practices of car dealers. Since these practices can leave an average consumer bewildered, we will show you how you were defrauded and fight to get you compensated.

All cases taken on contingency basis. All legal fees are paid by your car dealer or bank when we win, with absolutely no out of pocket cost to you.

08/01/2013

Selling Etch or Phantom Footprints or other Theft Protection

The cost of this is about $20 and consists of a strip of plastic, or acid etching onto doors, hoods, windows or some combination. Yet dealers charge between $199 and $399. The DMV allows dealers to apply “anti-theft devices” as only accessory pre-installed. The dealer is supposed to remove it if the customer does not want it. Some dealers refuse to remove it and will give you a variety of excuses as to why it cannot be removed and the charges to you remain. This is another lie. You have the right to have it removed and not be charged for this high profit rip off.

08/01/2013

Many dealers negotiate payments in the Sales Department.

You haggle for hours and finally agree to a down payment and a monthly payment. You have a deal, right? NO! The payment you have negotiated contains enough additional monthly payment so the dealer can add many thousands of dollars of high profit items and your monthly payment will not change.

This Payment Packing violates the VEHICLE CODE.
Payment packing has long been illegal in the State of California. It is a form of fraud that is subject to both civil and criminal sanctions. The leading case on payment packing describes the practice as follows:

[T]he . . .dealerships were engaged in a practice of misrepresenting to the customer the calculated monthly payment that he or she would pay in a deal. The customer would be quoted an inflated monthly payment amount which would assist the finance and insurance managers in presenting and selling aftermarket products based on artificially low, false numbers.

Casella v. Southwest Dealer Services, Inc. (2007) 157 Cal.App.4th 1127, 1138. The inflated price quoted in the sales department includes what is known in the trade as “leg,” that is, deliberate overcharges, to make room for sale of the extra goods and services in the finance department without raising the monthly payment beyond the initial inflated amount. “This conduct certainly falls within the prohibition of Penal Code section 487 which proscribes making false or fraudulent representation or pretense to defraud another of money.” Casella, 157 Cal.App.4th at 1138. Payment packing also violates the California Vehicle Code. See V.C. § 11713.19(a)(1).

THE CODE OF REGULATIONS – a Dealer must sell you the car at the advertised price- whether you know of the advertisement or not and may not be a “Cash Only” price – nor can a Dealer charge you more for an advertised car because you have poor credit.

13 California Code of Regulations §260.04(b): “A specific vehicle advertised by a dealer or lessor-retailer shall be in condition to demonstrate and shall be willingly shown and sold at the advertised price and terms while such vehicle remains unsold or unleased. Advertised vehicles must be sold at or below the advertised price irrespective of whether or not the advertised price had been communicated to the purchaser.”

The failure to sell to you at the advertised price also violates the VEHICLE CODE. Vehicle Code §11713.1(e): … Advertised vehicles shall be sold at or below the advertised total price, with statutorily permitted exclusions, regardless of whether the purchaser has knowledge of the advertised total price”.
California Vehicle Code §11713.1(k): It is unlawful to “Require a person to pay a higher price for a vehicle and related goods or services for receiving advertised credit terms than the cash price the same person would have to pay to purchase the same vehicle and related goods or services. For the purpose of this subdivision, “cash price” has the meaning as defined in subdivision (e) of Section 2981 of the Civil Code.

By violating provisions of the CODE OF REGULATIONS, THE VEHICLE CODE, AND THE ASFA, Dealers violate the CONSUMERS LEGAL REMEDIES ACT AND THE UCL.
The CLRA prohibits the use of “unfair methods of competition and unfair or deceptive acts or practices” in sale or lease transactions. (Civ. Code, § 1770, subd. (a)). The underlying purpose of the CLRA is “to protect consumers against unfair and deceptive business practices and to provide efficient and economical procedures to secure such protection.” (Civ. Code, § 1760.) Any consumer who suffers any damage as a result of the use or employment by any person of a method, act or practice declared to be unlawful by section 1770 may bring an action against that person for actual damages, injunctive relief, restitution of property, punitive damages, and any other relief the court deems proper. (Civ. Code, § 1780, subd. (a)).

07/31/2013

The Cash Customer vs. the Credit Customer

“If we raise the price of the car the bank will be happy and give you a lower interest rate because of your prior bankruptcy… and your payments will go down.”
I know most of you would not believe this, but I just got off the phone with a new client. According to the client , an Infiniti dealer near Fairfield beat him up (mentally) because of his credit score and prior bankruptcy and increased the price of the car $2,000.00 over the sticker price on a used car.

In this scenario the only way to make the monthly payment drop while increasing the price of the car is to lengthen the term (say 60 months to 72 months). Or, ask for a larger down payment, but that is not what happened here.
So, what the dealer did in effect, (smell any FRAUD?), is to charge a credit customer more than they would have charged a cash Customer. They also charged him for a service contract using the same logic (lie).

The Rule: A dealer may not charge a credit customer more for a vehicle than they would a customer paying cash. This is illegal and violates several California statutes including the Vehicle Code.

Louis A. Liberty Liberty & Associates, a PLC

07/30/2013

The first thing you must know about a car deal is that there is no “loan” if you have the dealer provide financing. The dealer is in the business of selling sales contracts to finance companies.

If you read the contract carefully, at the very top the title reads “Retail Installment Sale Contract” (RISC). The Dealer is also named as “Creditor.” Thus, the dealer is financing the vehicle on the terms contained in the contract.

Most dealers sell these contracts to banks or other financial institutions. When the dealer says, “We are working on getting you financed,” that means he is working on selling your contract to a bank or other financial institution.

If the dealer has not made a gross error, or has not exceeded the bank’s lending guidelines, most often you merely get notified from a bank that “Your loan was approved,” which is another lie. Remember, they (the bank?) are merely the “Holder” of the RISC, having purchased the RISC from the dealer under an “Assignment.”

You are not the “Customer” of this bank. The dealer is the customer, and the bank will always side with the dealer because the dealer brings this business to the bank. Should the bank ask too many questions of the dealer, or not purchase a high percentage of these RISCs, the dealer will take his business to a less “nosey” bank. Of course, the less nosey banks usually charge 20-25% APR or more.

If your credit is poor, the dealer may add $2,000-$4,000 or more to the price of the car because he knows in advance based upon your credit score that his bank is going to charge him up to 30% of the amount financed as a “discount” AND the interest rate of 20-30%. Dealers who charge a higher price to consumers with poor credit scores than they would charge to cash customers are violating California law.

However, it is difficult to prove a dealer has charged that higher price. And most people who have this low credit score merely want to know what the monthly payments are going to be and do not even realize they are signing a contract for many thousands of wasted dollars. By the way, the RISC is designed to focus your attention on areas of the contract that do not contain numbers, which discourages you from asking questions about the charges you are agreeing to pay.

07/25/2013

The dealer called me and says I must return the car.

What is going on?

In California, you signed a contract that says the dealer has up to 10 days to sell the contract to a finance company. In fact, you signed a clause giving him this right. If the dealer cannot sell your contract to a finance company AND gives you notice within 10 days, he has the right to cancel the contract. Note: he loses this right on day 11.

If he requires you to return the car, he MAY NOT demand you sign a new contract. You have the absolute right to have your down payment (including trade-in) refunded when you drop off his car.

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