Auto Fraud

The purchase or a lease of a new or a used vehicle is an important decision and a large expense. New Jersey has detailed laws to help make sure that car dealers treat consumers fairly and honestly. The Consumer Fraud Act (CFA) prohibits fraud, deception, misrepresentation, omissions, and unconscionable commercial practices when dealers advertise or sell a vehicle to you. If you are a victim of auto fraud or unfair business practices, you may be entitled to up to three times your actual damages, plus your attorney’s fees. This allows the firm to take your case on contingency, meaning that the firm can often represent you at no cost.

Do I have a Claim for Auto Fraud?

Dealers can violate auto fraud laws in many ways—in their advertising, when dealing with you directly, and in their contracts. It is hard for you to know whether a dealer has violated laws against auto fraud. If you believe you have been deceived or cheated, please contact the Law Office of David C. Ricci, LLC, for a free consultation. A skilled attorney will evaluate your claim and explain your options.

The following are some of the more common ways that dealers commit auto fraud:

• Junk Fees and Bogus Charges on New or Used Vehicles
  No matter how hard the dealership and the salesperson try to be your friend, their job is to sell you the vehicle and get as much money as they can in the process. They want you to purchase dealer add-ons, such as window-etching or GAP Insurance, because the add-ons mean more profit for the dealer. Additionally, dealers sometimes add junk fees to the contract. Dealers may not charge you fees unless your sales contract itemizes each fee and states what each fee covers. For example, you will often be charged hundreds of dollars for Documentary Service Fees, to cover preparation of paperwork, preparing the vehicle’s title and registration, etc. But dealers are required to itemize each documentary service they are providing and its cost on the sales contract. In addition, when a dealer provides you with the title and/or registration, it will often charge you a fee that exceeds its actual cost, and state that the fee is “estimated.” However, the dealer is not allowed to keep one penny more than what the Motor Vehicles Commission charges them. So if a dealer charges you an amount that exceeds its actual cost, the dealer is required to refund the excess charges to you. If the dealer keeps that extra amount, it may have committed auto fraud.
• Misrepresenting or Not Disclosing the History or Condition of the Vehicle
  When a salesperson tells you about a vehicle, he will often describe it to be in “excellent condition,” “only one previous owner,” “runs great,” “never been in an accident,” or similar praise. The dealer wants to describe the vehicle as positively as possible to persuade you to purchase it. However, the salesperson may not deceive you about the vehicle. He may not mispresent the mechanical condition or fail to disclose a known defect. The salesperson may not tell you that a car is in great condition or has no problems, if in fact the tires are bald or the brakes are shot. That is fraud, not sales puffery.

Dealers are required to disclose any blemishes in a vehicle’s title history, such as when a vehicle has been branded as Salvage or as a Lemon Buyback. Dealers are also required to tell you if the vehicle has sustained prior damage totaling $1,000 or more for repairs or body work. Often this information will appear on a Carfax, but not always. If a dealer tells you that it cannot run a Carfax because “the computers are down,” this is a warning sign that the vehicle has a negative history that the dealer wants to keep hidden.

• Other Deceptive Practices Regarding the Sale of a Used Vehicle
  The dealer may not deceive you about whether there are any existing warranties on the vehicle, including the manufacturer’s warranty, a dealer service contract, a third-party extended warranty/service contract, or any applicable lemon law warranty. The dealer may not sell you the vehicle “As-Is” (meaning without warranty) if there is a warranty that should be transferred or provided to you. Nor may the dealer tell you there is an existing warranty if there is not. Depending on its age and mileage, the vehicle may come with a Used Car Lemon Law warranty. If so, the dealer must use the specific state-approved forms, such as the “Used Motor Vehicle Limited Warranty” to disclose the lemon law warranty.

These are just some of the many ways that dealers commit auto fraud. The Consumer Fraud Act applies to all dealerships whether a new car dealership in Morristown or an independent used car dealership on McCarter Highway in Newark. If you believe that you have been cheated or deceived, please contact the Law Office of David C. Ricci, LLC, to schedule a free, confidential consultation to evaluate your options.