What Kinds of Car Purchase Issues are Considered Auto Dealer Fraud?
Provided by HG.org
There are many different types of fraud that may be perpetuated by an auto dealer when working with a client seeking a new vehicle. These may be through invalid income numbers, reports of higher down payments, recorded expenses that are much lower as well as misrepresentation and a lack of disclosure about various items with the vehicle.
While many of these could lead to criminal charges being issued, the dealership must be caught and evidence presented. It is often easier to seek civil recourse with the assistance of an experienced lawyer. However, once the contract has been signed, many of these issues are difficult to get out of for the customer.
Getting out of contracted agreements is complicated at the best to times, but when the car company is practicing fraudulent activity, the customer must prove this for a case to move forward. When the problem is with monthly payments that are too high to afford, there may be evidence that financial records were altered to show a greater income or less expenses each month. However, other problems exist when a warranty has expired but this was not disclosed to the customer. A misrepresentation of other factors with the vehicle could lead to issues with the car running, keeping an internal charge with lights and other items or with larger concerns such as gas gauge complications and engine problems.
Altered Paperwork Explained
Car companies attract customers through financing the deal internally or by using a company that approves the loan while the customer is in the building. This does take time, but many clients are willing to wait if they are able to drive the vehicle home the same day. However, in order to accomplish these feats, employees will alter the paperwork through income fields, expenses and similar items. This may lead the financing company to believe that the customer makes thousands more a month than he or she does, or the agency may be explained that there are no expenses that inhibit the ability to make payments each month.
Altering the paperwork in this manner is dealer fraud, and it may lead to legal consequences. These are actual crimes perpetrated frequently by many dealerships for both acquiring new customers and in increasing profits for the company.
However, this activity could harm the client when he or she is unable to make the payment because the amount is too high or when other expenses become more important. This could lead to additional amounts tacked on due to late fees that go entirely to the dealership. Unfortunately, in order to ensure a deal is struck, many employees feel the need to alter the numbers. This provides the ability to finance and in securing payments through a contract.
Undisclosed or Misrepresented Matters
When the dealership has not disclosed certain matters, they may be engaging in fraud. This could be as simple as a salvage title not explained or a warranty that is expired. If the engine was rebuilt from a defect, the customer should be aware of these problems long before he or she takes the car home. It is after the vehicle leaves the dealership lot that the customer could become injured as a driver. If the incident involves others, the car company could be liable for damages to multiple persons. The undisclosed matter then becomes a legal concern.
Many features with a newly purchased vehicle may be misrepresented to include the down payment and monthly payments. This happens when the amount is increased due to features that are not necessary, not wanted or are paid for but not included. If the vehicle is older, an update to certain parts of the car may be necessary. However, the customer usually pays for these even if he or she is not aware of it. The repaired portions may be misrepresented as new instead of fixed. It is possible to misrepresent what is needed for the down and not apply it to the financing paperwork as well. These are all potentially fraudulent actions.
Lawyer Help with Car Fraud
Many fraudulent actions the car dealership takes are not harmful to the customer. However, it is possible that the person buying the vehicle could be injured or economically damaged through the activities of the company. When this occurs, it is crucial to hire a lawyer to both determine the problem and strategize a resolution. If litigation is necessary, a lawyer may best represent his or her client in the court room.
Read more on this legal issueAuto Dealer Fraud: When Is It Worth It to Hire a Lawyer?
Car Dealership Altered the Financial Paperwork, Can I Get Out of the Deal?
Yo-Yo Financing Tactics
Do I Have a Right to Ask the Dealer for a CarFax Report Before I Sign?
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.