Automobile Fraud
There are various problems that may arise when purchasing a new or used motor vehicle. Deceptive business practices, fraud, “lemon law” violations, and breach of warranty are among the most common legal issues that consumers may encounter. A variety of federal and state laws provide consumers with a remedy if they have been the victim of these types of fraudulent and improper sales practices.
Long Island Automobile Fraud Attorney
Contact the law firm of Andrew M. Doktofsky, P.C. at (631) 673-9600 if you have been a victim of automobile fraud. Attorney Andrew M. Doktofsky is experienced and knowledgeable in litigating automobile fraud claims and will fight to recover damages that you have suffered due to a fraudulent vehicle transaction. Call Andrew M. Doktofsky, P.C. today to determine what your options are if you believe that you have been defrauded by an automobile dealer. He represents clients throughout the areas of Suffolk County and Nassau County, including Deer Park, Babylon, West Islip, Bay Shore, Brentwood, Hauppauge, Huntington, Lindenhurst, and Hempstead.
New York Automobile Fraud Information Center
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Types of Automobile Fraud
There are numerous ways in which car dealers can take advantage of consumers. The most common examples are:
- Yo-Yo Sales - In a typical scenario, the buyer takes possession of a vehicle from a car dealer. Sometime later, the salesman calls and says that the financing for the vehicle “fell through”. The dealer then demands that the purchaser sign a new financing agreement. What generally has happened in these situations is that the dealer was unable to sell the loan to a lender.
Why do dealers let the buyer leave with the car if the financing has not been approved? The reason is that dealers want to lock the purchaser into the sale. Dealers generally misrepresent to the purchaser that the sale is final, even though the financing has not yet been approved. The dealer does not want the potential buyer to go home and think it over.
- Sale of Rebuilt Wrecked Vehicles - Vehicles that have been severely damaged are rebuilt and then purchased by dealers at auctions. These vehicles may have damaged frames or improperly welded body and frame components. Such vehicles are unsafe and will not protect the occupants in an accident. The sale of such vehicles can give rise to claims against the dealer, including fraud and breach of warranty.
- Odometer Fraud - If a vehicle’s odometer has been tampered with, i.e. rolled back, the purchaser has recourse under the Federal Odometer Act. The act requires that the true mileage of the vehicle be disclosed upon transfer of the vehicle. Odometer fraud can be uncovered by looking at service records that show mileage at various points in time; having the vehicle’s computer checked for the actual mileage; and by purchasing Carfax and Autocheck reports. Also, title documents can be requested from each state where the vehicle had been titled. The mileage will be disclosed on each transfer of title.
- Lemon Vehicles - New York State’s Lemon Law is a statutory warranty covering new and used vehicles. The new car lemon law covers vehicles that are less than two years old or have less than 18,000 miles, whichever is sooner. The purchaser may be entitled to a replacement of the vehicle, or refund of the purchase price, if the vehicle cannot be repaired after four attempts, or the vehicle is out of service for thirty days or more. The defect must substantially impair the value of the vehicle.
The used car lemon law varies depending on the mileage of the vehicle at the time of purchase. Under the used car lemon law, the purchaser may be entitled to a replacement of the vehicle, or refund of the purchase price, if the vehicle cannot be repaired after three attempts, or the vehicle is out of service for fifteen days or more.
- Breach of Warranty - The federal Magnuson-Moss Warranty Act governs written warranties for products normally used for personal, family or household purposes, including new and used vehicles. In addition, purchasers of motor vehicles have various warranty rights under the New York State Uniform Commercial Code.
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Methods of Recovery For Automobile Fraud in New York
Most often, consumers in New York may have claims under New York’s deceptive business practices statutes, common law claims for fraud or breach of contract, or claims under the Uniform Commercial Code. These claims are described in more detail below.
New York’s deceptive business practice statutes – These are codified as Consumer Protection from Deceptive Acts and Practices under Article 22-A of New York’s General Business Law. Most auto fraud claims are brought under § 349, which prohibits deceptive acts and practices in the conduct of any business. A consumer who has been a victim under this section may bring an action in court to recover actual damages. Treble damages, up to a limit of $1,000, may be awarded if the court finds that the defendant willfully or knowingly violated the statute. The court may also award reasonable attorney’s fees to a prevailing plaintiff.
Federal Odometer Act – This act requires that the true mileage on a vehicle be disclosed upon sale or transfer of the vehicle. If it is not accurately disclosed, a consumer may be entitled to recovery under this statute.
New York’s Lemon Law – If a consumer has been sold a “lemon” vehicle, they may be entitled to recover under this law. Consumers have two options when pursuing a lemon law claim. They may bring an arbitration proceeding through the lemon law arbitration program run by the New York State Attorney General’s Office. Or, they may bring a lawsuit in court. The advantage of the arbitration program is that it is much faster than a lawsuit. The advantage of a court action is that attorney’s fees are awarded to the consumer if successful.
This law provides for a replacement vehicle or refund of a purchase price for a lemon car that is two years old or less or has less than 18,000 miles on it. Additionally, the vehicle must not be repairable after four attempts, and the defect must substantially impair the vehicle. If the vehicle is used, the law applies if the vehicle is still unable to be repaired after three attempts or is out of service for at least 15 days.
Magnuson-Moss Warranty Act – This federal statute, codified in 15 U.S.C. § 2301 et. seq., governs written warranties, implied warranties, and service contracts for consumer products. Violations of the act are enforced in state court, unless the amount involved is $50,000 or more, in which case an action may be brought in Federal court. Consumers who prevail in an action under the act may be awarded attorney’s fees.
New York State Uniform Commercial Code – This act governs commercial transactions in New York state, including sales of automobiles, and provides consumers with remedies for violations of the law.
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How to Protect Yourself Against Auto Fraud
You can protect yourself from being defrauded when purchasing a vehicle by following these steps:
- Read what you are signing. This is the surest way to avoid problems. Car dealers know this and will try to rush you through the signing process. Dealers will often cover up the paperwork with their arm, point to the signature line, and tell you to sign. Watch out for dealers who keep you waiting for hours and then say that you have to hurry because it is closing time.
- Verify the terms of the sale and, most importantly, ensure that what the dealer has promised is stated in writing on the sales invoice and the Retail Installment Contract (the financing agreement). The price of the vehicle and the cost of any add-ons, such as extra warranties, must be clearly stated in writing. Ensure that the interest rate and monthly payment on the financing agreement are the same as what the dealer promised. Make sure that you are not paying for worthless add-ons that you have not asked for, such as “VIN etching”, rustproofing, etc.
- Do not leave the dealership without a copy of each and every document that was part of the sale and financing of the vehicle. This will include the sales invoice, bill of sale, financing agreement, and applications for any extended warranties. Do not accept delivery of the vehicle without copies of all these documents. This will ensure that the dealer cannot modify the original documents or create a new set of documents after the sale.
- Do your research before going to the car dealership. Find out what the retail price of the car should be, and the cost of any options that you may want.
- If purchasing a used vehicle, obtain a Carfax report for the vehicle before purchasing it. Better yet, also obtain an Autocheck report, which is similar to Carfax. Neither Carfax or Autocheck are one hundred percent reliable. Having both reports increases your chances of discovering a problem.
- Be wary of obtaining financing from credit unions. Every credit union auto financing agreement contains a “cross-collateralization” clause. Essentially, this clause provides that the vehicle being purchased is collateral not only for the car loan, but also for any other loans and credit cards that the borrower has with the credit union. This can create problems later on if the borrower pays off the car loan but defaults on an unsecured loan or credit card issued by the credit union.
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Automobile Fraud Resources in New York
CARFAX – This website provides detailed vehicle history reports of used cars, including title problems, whether the car is a lemon, the ownership history and any accidents the vehicle ahs been in.
Kelley Blue Book – This website provides information about new and used cars, including new car prices and reviews, and trade-in and used car values.
New York State Department of Motor Vehicles - This department licenses automobile dealers and investigates complaints against dealers.
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Andrew M. Doktofsky, P.C. | Automobile Fraud Lawyer in Suffolk County, Nassau County
Contact the law firm of Andrew M. Doktofsky, P.C. today for a free consultation about your potential automobile fraud claim in Suffolk County and Nassau County, New York. This includes the communities of North Bay Shore, North Babylon, Lindenhurst, Commack, Central Islip, Freeport, Long Beach, Amityville and nearby areas. Andrew M. Doktofsky will help you determine what recovery options may be available to you if you have been a victim of automobile fraud. Contact Andrew M. Doktofsky, P.C. at (631) 673-9600 for a consultation about your automobile fraud claim in New York.