Salesperson at car dealership selling vehicles
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Auto-related scams again top the annual list of the most common consumer complaints issued by the Consumer Federation of America (CFA), based on a survey of state and local agencies. These range from false advertising, misrepresented new- and used-car sales, faulty repairs, auto leasing, rentals, towing disputes, and models that proved to be outright lemons.
According to the report, auto-related problems usually cost consumers a sizeable amount of cash, not to mention a healthy measure of inconvenience, so they’re more likely to report them and seek help. Some of the fraudulent escapades cited in the report are utterly jaw dropping. Here’s a look at some of the most onerous issues reported during 2018, taken from the CFA’s Consumer Complaint Survey Report:
• An elderly Arkansas man was pressured into signing a financing contract for a new vehicle costing $50,000, despite the fact that he could not afford the purchase, and it should have been clear to the dealer that he did not understand the terms of the agreement.
• A Florida man was buying a used truck, and the salesperson asked for $200 in cash for the registration to be processed, and further insisted the consumer make a check out in his name, not the dealership’s, for the balance of $2,300 and mail it to him. The consumer obeyed, but the employee later claimed the check had not arrived and threatened criminal action unless $2,300 would be wired to him immediately, which the buyer proceeded to do. The employee wound up pocketing that money plus the original $2,300 from the check that he had, in fact, received.
• A Maryland woman went to the dealership where her just-deceased husband had purchased his car to transfer the title to her name. She spoke only limited English, but the dealer was able to communicate with her in her native language. By law, the vehicle would have passed to her through the estate, but the dealer bought her out of the amount still owed on the car, then resold it to her and extended the loan by a year. As a result, the woman became liable for nearly an additional $10,000.
• Consumers complained that a Florida car rental company charged them for damage that the vehicles already had when they received it. In one instance, the consumer took a picture of the damage on the car after the company employee failed to note it on the contract as he had requested, which came in handy when he returned the vehicle and the same employee accused him of causing the damage.
• A single mother in Massachusetts bought a used car that was advertised as being of good quality and recently serviced. It soon broke down and she could not afford to fix it, so it sat parked on the street outside her home. The state consumer agency negotiated with the dealer to take the car back, but before that could happen, it was towed because of a parking ban during a snowstorm. The dealer retrieved the car, but turned around and claimed the woman had damaged it. A photo from the original ad, however, showed the damage was already there when she drove it off the lot.
• An Ohio woman who bought a used car from a dealership also purchased three extended warranties, with cost rolled into her bank loan. Over the next two years, whenever the consumer took the car in for repairs that should have been covered by the warranties, she was told that they were not. The Office of Consumer Affairs discovered that the dealer never notified the warranty companies that the consumer purchased the coverage, despite taking her money in the first place.
• An elderly woman in New York bought a seven-year-old car with high mileage for $11,000, and financed through the dealer at nearly 25 percent interest. At that, the finance agreement contained several hidden fees, including a $5 charge added to the amount debited every month when she made her payments from her bank account via phone. After struggling for four years to keep up with her loan obligation and having paid more than $22,000 on the loan, she fell into default, with the loan company threatening repossession.
You can read the CFA’s full report, including rip-offs regarding home improvements, retail sales, apartment rentals, Internet sales, and more here.
