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    Understanding Auto Fraud Cases

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    Loan Modification AttorneysPurchasing a vehicle can become a nightmare if you are involved with a fraudulent auto dealer. Auto dealer fraud is the unlawful and deceptive conduct of automobile dealers. Auto dealer fraud is not limited to one particular act but can occur during advertising or even when negotiating financial terms and vehicle pricing.

    Laws Dealing with Auto Fraud

    Consumer Protection Laws

    Consumer protection laws tackle issues such as false advertising and misrepresentations.

    Dealers of automobiles are prohibited from engaging in material misrepresentations, false statements, or deceptive or unfair practices with regard to vehicle sales. Vehicle dealers are required to post a specific notice in the window of the used vehicle that is up for sale. The notice should:

    ► State the name of the dealer and their contact information together with the vehicle's make, model, identification number, and year.

    ► Briefly note the terms of express warranties affecting the vehicle including the details on insurance coverage. If the vehicle has no express warranties, this information should also be clearly stated.

    ► Indicate if the manufacturer's warrant is still in effect and its expiry period

    ► Indicate whether there are any service contracts for the vehicle

    Examples of Auto Fraud

    Many forms of auto fraud are characterized by affirmative misrepresentations and non-disclosures.

    Affirmative misrepresentation misleads clients into having the wrong impression of a vehicle. For example, bait and switch advertising and odometer tampering are common acts of affirmative misrepresentation.

    Bait and switch is a common form of affirmative misrepresentation and involves deceptive or false advertising. A vehicle dealer who engages in bait and switch advertises one vehicle at a specific price and then tells the willing purchaser that the vehicle is not in stock before trying to persuade them to purchase a more expensive vehicle.

    Odometer tampering, also called mileage rollback, occurs when a dealer alters the odometer of a vehicle to show a number that is below the vehicle's actual mileage.

    Quoting a monthly payment that reflects additional items or services the client is not aware of is also a form of affirmative misrepresentation. In some instances of affirmative misrepresentation, the dealer will assert that the vehicle is new though it is not or labels a vehicle certified pre-owned when the manufacturer did not make such an endorsement. In some cases, the dealer misappropriates the purchaser's payments. Other acts of affirmative misrepresentation involve the auto dealer’s failure to properly disclose terms of financing on the purchaser’s Real Estate Sales Contract.

    A classic case of affirmative misrepresentation is the yo-yo financing scheme. The yo-yo scheme starts with the vehicle dealer selling the client a vehicle under a specific payment plan. A few weeks later, the dealer informs the client that the financing firm has turned down their credit application. Since the client has become fond of the vehicle, the dealer pressures the client to accept a more expensive payment arrangement.

    Non-disclosure takes place when a dealer withholds important information regarding the vehicle's value or desirability. In many states, auto dealers are required to inform purchasers whether a used vehicle has any significant damages or is classified as salvaged. Examples of non-disclosure may include failing to inform the purchaser the vehicle was previously a rental vehicle or that it was involved in an accident, has frame damage, other has hidden damages, or the vehicle's warranty is expired.

    The Difference between Auto Dealer Fraud Cases and Lemon Law Cases

    A Los Angeles Lemon law attorney will help you differentiate between auto dealer fraud and Lemon law cases. Auto dealer fraud cases deal with the deceptive tactics employed by auto dealers when selling vehicles. Lemon law cases involve the defects or problems affecting vehicles. A vehicle subject to the Lemon law is a new vehicle that has substantial defects which cannot be fixed even after numerous attempted repairs.

    A Los Angeles Lemon law attorney helps purchasers receive refunds or obtain a new vehicle if the vehicle they bought has mechanical problems or serious defects. Usually, according to Lemon laws, the vehicle manufacturer or dealer is given the opportunity to remedy the problems before a purchaser can make a claim under the provisions of Lemon laws.

    Proving Auto Fraud and Obtaining Damages

    The main means of obtaining retribution against vehicle dealership fraud is through a tort action. To make an auto fraud claim, you should show the vehicle dealer misrepresented or omitted significant facts that led to your financial loss. To be deemed as significant, the facts should pass the "but for" measure, which means the customer would not have bought the vehicle “but for” the misrepresented or omitted facts.

    When you are able to prove vehicle dealership fraud, you will be entitled to numerous remedies depending on your case. For example, if an accident is caused to the auto dealer’s conduct, the auto dealer may be liable for expenses relating to the accident, including repair of vehicles involved in the accident and even medical expenses. Other examples involve a court order to surrender the vehicle and force the dealer to provide a refund of all the money used in the purchase. You may be allowed to cancel outstanding obligations or loan balances, and even obtain compensation for the wrongful repossession of a vehicle. You may also be entitled to attorneys’ fees and court costs. In special cases of predatory or shameful conduct, you may be able to recover punitive damages.

    Why Hire a Lawyer for Auto Fraud Claims

    If you are involved in a case of auto dealer fraud, a lawyer can help you by interpreting the various laws dealing with this crime. Furthermore, your lawyer will help you prove affirmative misrepresentation or non-disclosure. If you are involved in a vehicle accident in Los Angeles, your lawyer will help you prove the accident was caused by the deceptive conduct of the vehicle dealer. Your attorney will also advise you whether or not to pursue a class action against a vehicle dealer.

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