Automobile Fraud

The attorneys at Mehlman TerBeek LLP have represented many clients in cases against car dealers who have deceived or defrauded them. These are some of the illegal practices you should look out for:

Previously Damaged Vehicles

Automobile dealerships must inspect used cars prior to sale and truthfully disclose any damage to potential buyers. If you are not informed of prior accident damage when you buy a car, you may be entitled to return it for a refund and possibly sue for damages.

Irregularities in the appearance or performance of your vehicle may indicate that it has been in a previous accident: these can include over-spray paint on portions of the vehicle, panels that do not line up or fit correctly, doors or trunk lids that do not close properly, accelerated or uneven tire wear, and front-end pulling. To confirm that the vehicle was in an accident, you can research the vehicle's history and/or have a qualified mechanic inspect the vehicle.

Negative Trade-in Equity

Customers often trade in vehicles for which they still owe money in loans. In these situations, dealerships must disclose how the negative equity is calculated in the Retail Installment Sale Contract or Motor Vehicle Lease Agreement. Usually this disclosure can be accomplished by completing the section of the contract entitled "Itemization of the Amount Financed." In this section there are line items that refer to the agreed trade-in value, "prior credit or lease balance," and "net trade-in." If you find that these items were completed incorrectly, the dealership may be in violation of the Automobile Sales Finance Act or the Vehicle Leasing Act.

Odometer Fraud

Misrepresentation of vehicle mileage is illegal. If the dealer has tampered with the odometer on a vehicle you purchased, failed to notify you that the odometer has been replaced, or failed to notify you that the odometer has rolled through all the digits and started over, you may be entitled to seek a full refund of your money as well as punitive damages and attorneys' fees and costs.

You may be able to confirm a mileage discrepancy by checking Department of Motor Vehicles records for the car, researching its history on websites such as carfax.com, consumerguide.com and autocheck.com, interviewing previous owners, and/or having a mechanical inspection done.

Sales Fraud

Some automotive dealerships engage in illegal sales practices such as hiding negative equity, bait and switch advertising, demanding purchase of an extended service contract as a condition of financing, and packing the deal. Packing is probably the most common scheme: by increasing the amount of a quoted monthly payment to include aftermarket items such as service contracts, paint and fabric protection, gap insurance, and security systems, the salesperson can pre-sell these high-profit items to the customer without disclosure. The sales representative may also conceal the term of a loan or the annual percentage rate to achieve the same result.

Foreign Language Contracts

Dealerships are required to have signs posted notifying consumers who negotiate contracts in a foreign language that they are entitled to a copy of the contract in that language. If a foreign language contract is not provided at the time of sale, the consumer can cancel the contract and receive a refund. If the consumer negotiated the contract through his own interpreter, however, he or she is not entitled to a foreign language contract.

If you believe you have been the victim of fraudulent business practices when buying a car, contact Mehlman TerBeek LLP at 925-935-3575 to discuss your legal options with one of our attorneys.