AUTO FRAUD LITIGATION LA LAW LIBRARY AUGUST 20, 2014 SPEAKER: - - PowerPoint PPT Presentation
AUTO FRAUD LITIGATION LA LAW LIBRARY AUGUST 20, 2014 SPEAKER: PAULIANA LARA, ESQ. CONSUMER ACTION LAW GROUP OF PANZARELLA, GUREVICH & RODE, PC 3700 EAGLE ROCK BLVD., LOS ANGELES CA 90065 (818) 254-8413 TODAYS DISCUSSION POINTS
LA LAW LIBRARY – AUGUST 20, 2014 SPEAKER: PAULIANA LARA, ESQ. CONSUMER ACTION LAW GROUP OF PANZARELLA, GUREVICH & RODE, PC 3700 EAGLE ROCK BLVD., LOS ANGELES CA 90065 (818) 254-8413
PRACTICAL TIPS FOR REPRESENTING CONSUMERS IN
AUTO FRAUD CASES
COMMON FACT PATTERNS – TOP THREE CAR DEALERSHIP
SCAMS
CAUSES OF ACTION BROUGHT ON BEHALF OF
CONSUMERS
REVIEWING THE CONTRACT AND OTHER DOCUMENT SEND DEMAND WITH COPY OF COMPLAINT AMENDING COMPLAINT AFTER 30 DAYS ATTORNEY FEES
BAIT AND SWITCH UNDISCLOSED PRIOR ACCIDENTS OR FRAME DAMAGE ODOMETER FRAUD
CAR DEALER ADVERTISES ONE PRICE FOR A SPECIFIC VEHICLE AND THEN ASKS
ANOTHER AMOUNT ONCE CONSUMER IS READY TO MAKE THE PURCHASE
TACTICS ARE NOT LEGAL AND ARE CONSIDERED “AUTO FRAUD” WHICH IS
PUNISHABLE BY FINES AND DAMAGES
FRAME DAMAGE FROM AN ACCIDENT: Makes a car unsafe to drive and causes
many other problems down the line
Makes car more dangerous in an accident Costs owner thousands of dollars in repairs
FRAME DAMAGE = SALVAGE TITLE
Dealer MUST disclose this to buyers; often DO NOT
CARFAX, AUTO CHECK, OTHER VEHICLE HISTORY REPORTS – REPORT MILEAGE
USED TO BE HARD TO PROVIDE IF DEALER CHANGED THE MILEAGE READING NOW, CAN TRACK; HELP BUYERS DETERMINE WHETHER THE CAR THEY PURCHASED
REALLY HAD THE NUMBER OF MILES THE ODOMETER SAYS IT DOES
Violation of the Consumers Legal Remedies Act, Civil Code § 1750, et
seq.
SELLER violated the CLRA by:
(1) Misrepresenting the quality and condition of the VEHICLE; (2) Misrepresenting the ownership history of the VEHICLE; and (3) Knowingly selling a defective VEHICLE. (For Merch only, add below
according to the case)
Selling the VEHICLE more than advertised price; Failing to disclose prior Rental VEHICLE; Failing to disclose prior Accident; Failing to disclose prior Frame damage;
Violation of California Vehicle Code § 11713.1 (BAIT & SWITCH) California Vehicle Code § 11713.1(d) specifically, it states in
pertinent parts:
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. In this case SELLER sold the VEHICLE more than advertised price
Failure to Sell Car As Advertised in Violation of 16 C.F
.R. 238.0
Failing to notify BUYERS that VEHICLE was prior rental
During the purchase, BUYERS asked if the VEHICLE was a “Prior
Rental” to which SELLER assured BUYERS that the VEHICLE was not a “Prior Rental”.
The fact that SELLER did not disclose the VEHICLE as a “Prior
Rental” constitutes:
“Fraud and Deceit” pursuant to Civil Code §§ 1710, 3294; Violation of California VEHICLE Code §§ 11713(a); Violation of 13 C.C.R. 260.03 (“statement of VEHICLE condition must
accurately reflect the known condition”).
Failing to notify BUYERS that VEHICLE had Prior Frame Damage
(use this if shows vehicle was announced frame at the auction)
During the purchase, BUYERS asked if the VEHICLE had been involved in an
accident, to which SELLER assured BUYERS that the VEHICLE was in good condition and free from mechanical and/or structural defects or damages.
The Auto Check clearly indicates that Prior Frame Damage was announced at
the Auction. SELLER had superior knowledge of the VEHICLE’s condition but, despite this knowledge, SELLER failed to inform and intentionally concealed such facts from BUYER.
Frame Damage constitutes a material condition of the VEHICLE, impacting its
safety, warrantability, and value.
The fact that SELLER did not disclose the VEHICLE’s “Prior Frame Damage”
constitutes “Fraud and Deceit” pursuant to:
Civil Code §§ 1710, 3294; Violation of California VEHICLE Code §§ 11713(a); Violation of 13 C.C.R. 260.03 (“statement of VEHICLE condition must
accurately reflect the known condition”).
Advertising failed to notify that vehicle had been involved in
prior accident
The fact that the dealership’s advertising stated “NO ACCIDENT” and the
VEHICLE in fact had been involved in an accident, constitutes the classic “Bait and Switch” technique pursuant to 16 C.F .R. 238, 238.2.
It also constitutes “Fraud and Deceit” pursuant to:
Civil Code §§ 1710, 3294; Violation of California Vehicle Code §§11713(a); Violation of 13 C.C.R. 260.03 (“statement of vehicle condition must accurately
reflect the known condition”)
Failing to honor SELLER’S warranty:
Violation of the Song- Beverly Consumer Warranty Act, Civil
Code § 1790, et seq. (use this if there is a warranty from seller)
Violation of implied warranty of merchantability and fitness.
(use this if there is no warranty or car sold AS-IS)
The sale of the VEHICLE included an implied warranty of
merchantability and an implied warranty of fitness, pursuant to Civil Code Section §§1792, 1792.2.
Violation of single document rule §2981.9
The single document rule requires that “all of the agreements of
the buyer and seller with respect to the total cost and the terms
document.
Example of violation: SELLER had BUYERS signed two contracts.
SELLER did not execute the “Acknowledgment of Rewritten Contract”.
Violation of Deferred down payment Civil Code §2982
Civil Code 2982 states pertinent part: If payment of all or a
portion of the down payment is to be deferred, the deferred payment shall be reflected in the payment schedule disclosed pursuant to Regulation Z.
Example: SELLER violated Civil Code §§ 2982 subdivision (7)(c) and
(6)(d) by listing the down payment as $1,200 on Section 6 line G of the RISC. SELLER failed to itemize the $500 deferred down payment in the Contract including the amount and the due date.
Violation of Regulation Z (12 C.F
.R. § 226.22) (for backdating)
Regulation Z states in pertinent part: The annual percentage rate
is a measure of the cost of credit, expressed as a yearly rate, which relates the amount and timing of value received by the consumer to the amount and timing of payments made.
SPEAKER: PAULIANA LARA, ESQ. CONSUMER ACTION LAW GROUP OF PANZARELLA, GUREVICH & RODE, PC 3700 EAGLE ROCK BLVD., LOS ANGELES CA 90065 (818) 254-8413