5/27/04
Today, Public Citizen sent letters to government officials in Florida,
California, Texas, Tennessee and Georgia about dealership scams in their
states. Since beginning our collection of dealership fraud complaints in
December, these five states have had the highest number of complaints.
 
In the letters, we called on officials in Consumer Affairs offices of these
state's Attorney Generals' and Governors' offices to take notice of the
dealership frauds described by their state's consumers and to take action to
prevent them in the future.
 
Over 700 consumers have contacted Public Citizen describing their
experiences with auto dealers. Follow this link to read a summary of our
survey complaints and some of these consumers' stories:
 
 
Follow this link to read the state-specific fact sheets and letters sent to
CA, GA, FL, TX and TN officials:
 
 
For more information, read our full press release below or visit our
 
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Public Citizen Press Release
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May 27, 2004
Public Citizen Notifies Government Officials in Five States of Auto Dealer
Scams
 
After Being Deluged With Stories from Consumers, Public Citizen Sends
Information to Officials in Florida, California, Texas, Tennessee and
Georgia
 
WASHINGTON, D.C. - Public Citizen is providing government officials in five
states with information about reported rip-offs by auto dealers in those
states, ranging from loan terms being changed without customers' knowledge
to buyers being charged for "free" add-ons. The stories are among more than
700 received by the consumer advocacy organization after publishing a report
detailing how auto dealers scam consumers.
 
The December 2003 report, Rip-Off Nation: Auto Dealers' Swindling of
America, outlined a wide range of industry-wide practices, including
inflating the cost of warranties, reporting one set of numbers to the
customers and another set to the bank, and stuffing contracts with extras
that the customer never agreed to pay for. After issuing the report, Public
Citizen encouraged consumers to contact the organization if they thought an
auto dealer had defrauded them during a vehicle purchase.
 
The largest number of complaints came from Florida (90 complaints),
California (52), Texas (42), Tennessee (22) and Georgia (20). Public Citizen
today sent letters to the attorneys general of Florida, California and
Texas; the Tennessee Division of Consumer Affairs; and the Georgia
Governor's Office of Consumer Affairs, providing details of the experiences
reported by consumers in those states. Public Citizen sent the information
only of those buyers who gave their permission.
 
"They told me that my interest rate was 2.15 percent but after I signed I
did some calculations and realized it is actually 10 percent!" wrote a Los
Angeles consumer. "Also, they charged me for both an aerodynamics package
and a spoiler, but a spoiler is included in the aerodynamics package!"
 
Said an Austin, Texas, buyer, "I was told that I would have a four-year loan
and the loan coupons turned out to be [for] a five-year loan." A
Jacksonville, Fla., consumer reported three different cash prices for the
vehicle on three different contracts. And an Atlanta, Ga., consumer reported
being charged a $1,000 fee just to receive a loan.
 
"Unfortunately, these stories of egregious and blatant consumer rip-offs are
all too typical," said Public Citizen President Joan Claybrook. "From the
snapshot these buyers have provided, it is evident that dealers are ripping
off customers, sometimes for thousands of dollars each. The government
officials should take action now to stop this fraud."
 
In the letters, Public Citizen urged government officials to assess whether
the states' consumer laws provide adequate protection for auto purchasers
and to collaborate with other state agencies, such as the Department of
Motor Vehicles, and with other consumer protection or attorney general's
offices around the country, to stem dealership fraud.
 
Consumers buying automobiles are particularly vulnerable to being ripped off
by auto dealers because of the large size of the purchase, the flurry of
paperwork and the fact that the financial deals are often complicated. Some
dealerships use unscrupulous tactics to squeeze the highest possible profit
from each sale.
 
Public Citizen issued its report in December 2003 detailing the many ways
that consumers may fall victim to unscrupulous dealers. They include:
 
• The dealer boosts the manufacturer's suggested retail price with extras,
some of which may already come with the vehicle.
 
• Sales managers run credit reports on potential buyers without their
permission to learn how much credit the customer has and even what the
customer's last car payments were, for use in price negotiations.
 
• Banks may have "sweetheart" relationships with dealers, imposing an
uncompetitive interest rate in order to kick back to the dealer the dollar
value of a few percentage points of the loan without the buyer's knowledge.
 
• Customers are manipulated during the sales process to pay more than the
agreed-upon price. This is often done with the use of worksheets listing
add-ons.
 
• If the sale is made after hours, customers are asked to sign blank bank
forms that the dealer offers to fill in later, ostensibly after talking to a
bank during business hours. The numbers reported to the bank may not reflect
what the customer agreed to.
 
To protect themselves, consumers should: 1) obtain financing at verifiably
competitive rates or independently of the dealer; 2) refuse to sign any
contract containing an arbitration clause; 3) never sign blank financial
forms; 4) remember that dealers make money from extras and add-ons and view
with skepticism offers of "free" items; and 5) never drive a car off the lot
before all financial transactions have been agreed upon by the lending
institution. Consumers must also be willing to walk away from the deal at
any point that something smells fishy or they are treated disrespectfully,
as hard-ball sales tactics can distract consumers from the precise terms of
a deal.
 
To view the letters sent to the attorneys general as well as new national
and state fact sheets, go to:
interested in filling out surveys and reading more information should visit:
www.autodealerscam.org To read Public Citizen's report, go to
 
 
 
5/20/04
IN THIS UPDATE:
 
1. Anti-Scam bill in CA needs your help
2. News updates on TX, NY, IL and NJ
 
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Legislation to End Rip-Offs in CA Needs Your Support Today
 
Last month we told you about legislation California that would establish a
three day "cooling off period" for vehicle purchasers, make financing scams
more difficult to pull off, and craft new standards for "certified" used
cars. This landmark legislation would be an terrific first step towards a
consumer-safe marketplace in CA and the rest of the country.
 
Take Action Now!
 
The bill, AB 1839, passed out of committee yesterday (May 29) following a
very tough fight. It will likely be voted on on the Assembly floor early
next week (Tuesday the 25th or Wednesday the 26th). Strong opposition to
this bill by the auto dealer lobby must be countered by your voice of
support. Follow this link to send a letter of support to the bill's sponsor,
Assembly member Cindi Montanez, or if you are a CA resident to your
Assembly member.
 
 
**If you are a California resident, please forward this call to action to
other interested people in your state. Now is the time to make a difference!
 
IN THE NEWS - TX, NY, IL, NJ
 
On April 6 Public Citizen and Consumers for Auto Reliability and Safety
called on the Texas Legislature to repeal a law - passed under former Gov.
George Bush - that blocks consumers from recovering billions in overcharges
on car loans and allows dealers to keep financing kickbacks secret. To learn
 
The New York Attorney General, Elliot Spitzer, proposed legislation that
would take steps to eliminate racial disparities in automobile financing by
making the financing process more transparent and equitable for all
consumers. The legislation would establish a flat rate that all consumers
would be charged for arranging financing.
 
The Illinois Attorney General is pushing a bill that would overturn an old
law which allows dealers to hide markups and that would require dealerships
to disclose how much they've added to a lender's rate. The legislation,
brought before the IL Legislature in February, has yet to be brought to a
vote in part because of the powerful dealers' lobby in the state.
 
The New Jersey Attorney General has filed two complaints against dealerships
and their financing arms. The first, against DCH Auto Group, claims a
violation of consumer protection laws. The second lawsuit seeks restitution
for consumers affected by fraudulent practices of TradeLease Corp and
Antares Leasing Corp.
 
4/02/04
In the past few weeks, consumer friendly laws that would drastically curb
dealership scams were proposed in CA, NY and IL. Also during this time,
consumers in FL dodged the bullet on unfriendly legislation that would have
curtailied their rights to seek grievances against unscrupulous dealers.
 
IN THIS UPDATE:
 
1. NY, IL Attorney Generals support consumer friendly dealer legislation
2. Anti-Scam bill announced in CA
3. FL consumers keep their right to sue
4. 60 Minutes to air dealership fraud story this Sunday, April 4 at 7 p.m.
ET/PT
 
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1. PRO-CONSUMER LEGISLATION IN NY, IL
 
NY Attorney General Eliot Spitzer is expected to seek legislation that would
require dealerships to disclose the profit they make on vehicle financing,
following a two-year investigation by his office into an Albany, NY,
dealership. IL Attorney General Lisa Madigan supports legislation that would
require dealers to disclose their markup on finance rates.
 
Follow this link to read Spitzer's press release
 
TAKE ACTION NOW!
 
Are you a NY or IL resident? If so, contact Attorneys General Spitzer or
Madigan to support his/her proposal and tell him/her your story. If you live
elsewhere, contact your state AG and urge them to join NY and IL AGs in
their efforts and to support similar legislation in your state. To find
contact information for your AG, follow this link:
 
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2. ANTI-SCAM BILL IN CALIFORNIA
 
On Tuesday, March 9, 2004, California Assemblywoman Montanez launched AB
1839, the Car Buyer's Bill of Rights. The consumer advocacy groups Consumers
for Auto Reliability and Safety (CARS) and Public Citizen are rallying
California consumers in support of the bill to speak out, share their
stories and curb dealership scams in the state.
 
TAKE ACTION NOW!
 
Check out CARS' website (www.carconsumers.com/AB1839.html ) to learn more
about the bill and about sending a letter to your Assembly person in support
of ending dealership scams.
 
INTERESTED IN SHARING YOUR STORY?
 
CARS is looking for California consumers who have been scammed by
dealerships in one of the 4 key areas covered by the bill who would be
available to speak to consumer reporters. The key areas are:
 
1. excessive interest charges
2. wildly overpriced add-ons
3. difficulty with a used car (when a 3-day cooling off period would have
been helpful)
3. difficulty with "certified" used cars that were really lemons or had
major problems
 
If you are interested in speaking with CARS and consumer reporters, please
email autosafety@citizen.org and let us know.
 
3. ANTI-CONSUMER BILL DEAD IN THE WATER IN FLORIDA
 
A bill that would have required 30-day written notices from unhappy auto
buyers before they can sue dealers and that would have limited lawyers fees
paid by dealers was stalled in the FL Senate Judiciary Committee on March 23.
 
TAKE ACTION! This bill may resurface - if you are a FL resident, write to
your Legislators and tell them that you are opposed to the limiting of your
rights to sue unscrupulous dealers. If you aren't from FL, write to the
bill's sponsor, State Sen. Michael Bennett, R- Bradenton.
 
FL Senators contact information:
 
 
FL House Members contact information:
 
For local media on the bill:
 
 
 
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4. 60 Minutes "Buying Cars: A 'Rip-Off'?
 
 
Steve Kroft investigates hidden finance charges and the victims of these
routine markups that often costs consumers thousands of dollars.
 
12/19/2003
Welcome to the Auto Dealer Fraud Listserv.
 
Since we launched our campaign to educate the public and call on law
enforcement to investigate and end the widespread fraud, over 500 consumers
have joined our Listserv or filled out our consumer survey. Almost 7,000
people have downloaded our report and 20,000 have visited our page. Finally,
the news about auto dealer rip-offs is getting out. Help the news spread -
tell your friends, family and coworkers to visit www.autodealerscam.org  so
that they too can learn more and fill out our survey and join our Listserv,
if they are interested.
 
AUTO DEALER FRAUD IN THE NEWS
 
Public Citizen's report and NBC Dateline's show on auto dealer fraud got
substantial coverage in both local and national news. Check out some of the
stories - links available at the bottom of this message.
 
YOU CAN MAKE A DIFFERENCE - TAKE ACTION
 
Hundreds of you have written to tell us that you have experienced the some
of the rip-off schemes described in our report. As you may know, Public
Citizen has called upon all of the U.S. Attorneys General to investigate
dealership fraud and to prosecute where necessary. The AG's need to hear
from you, consumers in their states, that these frauds are widespread and
that they affecting people where you live.
 
Take a few minutes to call, email or send a letter to your AG. You can find
her or his contact information on this website:
 
Possible talking points and a sample letter are below.
 
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Talking points:
 
1. Unethical and perhaps illegal activity is occurring in auto dealerships
across the country and is present in my community.
2. I experienced the following problems related to the purchase/lease of my
vehicle:
 
a. Credit report issues - my credit report was pulled without my permission
and prior to any negotiations regarding the price of the vehicle.
b. Dealership financing problems - I was quoted a payment that was higher
than necessary to pay off the price of my vehicle or where I was first
quoted one payment but it changed after I took my vehicle home.
c. "Contract Stuffing" - add-ons were included in the sales contract without
my permission or without my ability to refuse them.
d. Price inflation - products or services, such as Gap insurance, Etch, or
service contracts were quoted to me at an outrageously high price.
e. "Free" product charge - I was told that a service or product was free,
only to realize later that I was in fact charged for it.
f. "Spot Delivery" problems - the dealer allowed me to take the vehicle home
before all of the paperwork with the bank was approved. I was later informed
that I could not refuse any new terms and/or return the vehicle because I
took "spot delivery" of the vehicle.
g. Other problems not listed…
 
3. You, as the Attorney General of my state should look into this problem
with regard to the dealerships named above. I urge you to investigate
dealership scams and to prosecute wrongdoers, to assure that unscrupulous
dealerships are not able to rip-off other customers.
 
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Sample letter:
 
Dear Attorney General _____,
 
I am a consumer, living in your state, who is concerned about the widespread
unethical and even illegal activities occurring at auto dealerships. I have
recently learned that the scams that I have personally felt are affecting
consumers throughout the country and that the consumer advocacy group Public
Citizen has called upon you and the other AGs to investigate them. I implore
you to take action.
 
The fraud described by groups like Public Citizen and in recent media
reports is not a theoretical matter; it happened to me. Here is my story:
 
You serve our State as the chief legal officer. It is in this capacity that
I ask you to investigate auto dealership fraud and to work for the people of
our State to assure that no consumer is fleeced or lied to during the
purchase of a vehicle.
 
Sincerely,
 
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AUTO DEALER NEWS COVERAGE LINKS
 
NBC Dateline: Car Sales: Tricks of the Trade
 
AP Wire (covered in Ohio, West Virginia, Michigan, South Carolina, Idaho,
California, Utah, Virginia, Texas, Georgia, Florida
 
 
Consumer Affairs: Report Alleges Massive Fraud in Auto Sales
 
Click on Detroit - WDIV Channel 4: Group Calls For Investigation Into Car
Sales Tactics: Whistle-Blower Says He Ripped Off Customers For $33 Million
 
MSN Money: Watchdog says car dealer scams are rampant
 
 
 
12/12/2003
Auto Dealer Scam Story on Dateline Follow-Up Tonight 8PM EST
 
As many of you know, last week Dateline NBC ran an hour-long story on auto
dealership fraud, including a hidden camera investigation. Tonight at 8 pm
EST, Dateline will be running a follow-up to the story, that includes Joan
Claybrook, President of Public Citizen. For more information on Dateline's
first story and to watch a part of the hidden camera video follow this link:
 
Within the last five days, hundreds of consumers have written us detailing
the problems they have experienced when purchasing or leasing a vehicle.
Check back on our Web site next week for some of their stories. You can also
visit our page - www.autodealerscam.org - to tell us your story if you have
not already completed the survey.
 
Thanks,
 
Public Citizen