Don't YOU become a VICTIM.
SPOT DELIVERY
You’ve negotiated a price, signed all paperwork, had a plate put on the car, received the keys and driven home. A few days or even weeks later, the dealer calls stating that you “did not qualify” for the loan and that you must return to the dealership to sign new documents. If you signed financing documents and registration applications, obtained insurance for the vehicle, received an odometer statement, had a new license plate or transferred your old plate to the new car,
THE CAR BELONGS TO YOU!
In the auto industry, this scam is referred to as Spot Delivery or a Yo-Yo sale. This practice is illegal in Pennsylvania. The dealer is obligated to firmly place your car loan with a lender BEFORE doing the title work and delivering the car to you. If you re-sign documents, most likely, there will be an increase in interest rate, length of your loan and/or the monthly payment. Even if the dealer threatens to repossess the car, you are generally not obliged to re-sign lending documents. Consumer laws are written to protect car buyers from this fraud by dealers or finance companies.
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UNDISCLOSED PREVIOUS DAMAGE
The law requires that any significant prior damage be disclosed so that the buyer can make an informed choice. Yet, sales of rebuilt wrecks and, even used cars as new, are not uncommon.
| Get an assurance from the dealership, ORALLY and IN WRITING, that the car has not been involved in a prior accident. Unless you knowingly choose to buy a car with an imperfect history, do NOT accept any sales contract that contains language such as, “may be prior rental car”, “program car”, “previously sold and returned”, etc. You may be inviting trouble. Additionally, research the history of the car. Submit the Vehicle Identification Number (VIN#) to a service such as CARFAX. But, keep in mind, this information may not provide the complete story. If you learn that your vehicle was sold with undisclosed damage, take photographs and get a statement from a trusted mechanic. You may be entitled to cancel the deal and receive money damages. |
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LEASE vs. BUY
Leasing has its benefits--and its disadvantages. In the long run, leasing is often more expensive, even if the base monthly payment is less. Lease tax is 3% higher than sales tax in Pennsylvania, and
insurance requirements are higher. Many leases appear to offer low rates, but come with unusually low mileage allotments, sometimes only 10,000 per year. REMEMBER, at the end of the lease,
YOU OWN NOTHING. Many leases allow a consumer to terminate the lease early. However, a number of leasing companies or banks levy a huge and unfair EARLY TERMINATION PENALTY upon the customer. Sometimes these charges are unjustified and inflated.
Federal and state laws protect consumers from unfair or unreasonably large lease charges and Early Termination charges.
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INACCURATE LOAN APPLICATIONS
Sometimes a car dealership will falsify a loan or credit application when they have a customer with problem credit or one that wants to buy a car he can’t afford. Watch out for tactics such as:
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- Inflate the sales price, then show a phantom downpayment
- Omit other borrower loan obligations
- Show a cash downpayment not really received, but payable “on the side” weeks after delivery or through post-dated checks
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These tactics are all illegal, potentially criminal, and may provide the basis for a consumer fraud suit against the dealer or the finance company. Finance companies and banks have legitimate guidelines for lending. Regardless of what you are told by the dealership, DO NOT SIGN a contract or loan
documents with “side deals” or “understandings” which are not truthful on the face of the loan application.
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REPOSSESSIONS
Most all vehicle finance agreements permit the lender to repossess a vehicle if there is a default in payments. But each loan agreement is different. Extension agreements, partial payments, or specific contract terms may preclude the repossession at a particular point in time. The law also forbids any threat of violence or “breach of the peace” by the repossessor. Re-sales of repossessed vehicles are frequently unreasonable “insider” sales at low prices, which can create a large balance due or deficiency for the borrower. |
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The law provides protection to the consumer from unlawful or overly aggressive repossession and resale tactics. Consumers may be entitled to bring a suit for “wrongful repossession” against the finance company or repossessor and claim for damages, attorneys fees and costs, even if there
has been a default in payments.
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Home Financing Fraud
MORTGAGE LOANS
Home mortgage loans are most people's single largest obligation. Many loans are structured so that the lender (mortgagee) escrows funds for taxes, insurance, or other obligations.
Common Consumer Complaints are:
- Mismanagement of Escrow Accounts
- Overcharges for Early Payoff
- Illegal Late Fees
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Federal and state laws protect consumer borrowers from such overcharges and the law provides legal redress if your legal or contractual rights have been violated. If you believe there has been mismangement or overcharges to your mortgage loan you may have legal recourse.
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If you are buying:
- Siding
- Addition
- Roof
- HVAC
- Repairs
Beware of:
- High pressure tactics
- High interest rates
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Laws protect consumers from high-pressure home improvement sales.
Consumers in Pennsylvania who enter into any sales at their residence, OR have refinanced or taken a second mortage on their home, are protected under federal and state law with a
three-day cooling off period. This time period enables the consumer to reconsider, and
CANCEL THE CONTRACT for any reason, or no reason at all, generally without obliagation.
If you believe that you have become a victim of home finance fraud, or if a merchant or lender came to your home without giving you a written three day right to cancel, you may have legal recourse.
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