Missing air bags endanger lives

Air bag theft and fraud are putting consumers’ lives in danger. Tragically, missing air bags sometimes cause serious or even fatal injuries.

In a heart-rending incident, San Diego-area parents Robert and Mary Ellsworth, members of CARS, lost their 18-year-old son Bobby, who had recently graduated from high school Why?  Because his friend’s pickup truck was missing the front air bags. Bobby was riding as a passenger on a narrow, winding road when the the pickup collided head-on with a BMW.  The Ellsworths didn’t find out until later that the pickup had been in an earlier crash. The front end was heavily damaged and both front air bags had deployed.

The former owner’s insurance company, State Farm, had decided it was not worth fixing. So the insurance giant “totaled” it. But that wasn’t the end of the line. Instead of ensuring it was sold only for scrap, or parts, they sent it to an auction where it was sold to the highest bidder. The same thing happens with an estimated 1.5 million vehicles each year. This way, State Farm and other auto insurers manage to recoup more for their “totaled” cars than if they were sold only for parts.

The buyer made shoddy repairs and cut corners. Sealing Bobby’s fate, he decided not to replace the air bags. Instead, he stuffed the empty compartments where the air bags belonged with craft paper. Then he covered them up, so it appeared that the air bags were intact.

Bobby’s friend, who was driving the pickup, and the driver and passengers riding in the BMW — equipped with air bags — survived. After the crash, experts who examined the wreckage concluded that if the passenger air bag had been replaced, Bobby would also have survived.

Air bags are a tremendous bargain, especially compared to losing a life. But — not to unscrupulous rebuilders, who are only interested in making a quick buck. Auto crash investigators have discovered air bag compartments packed with whatever was handy — rags, Styrofoam, packing peanuts, or even crushed beer cans.

Then the auto fraudsters cover them up. It’s cheap and easy to buy fake air bag covers over the internet.  Companies that sell the fakes offer them complete with manufacturer logos or the initials “SRS” — standing for “supplemental restraint system” — embossed on the cover.  Connecticut’s former Attorney General, Richard Blumenthal, cracked down on one company that advertised fake air bags in Connecticut. But  state law enforcement officials’ hands may be tied, when the companies are located in other states, or sell the fakes over the internet.

Won’t a warning light come of if the air bags aren’t working?  Not necessarily. Some shady rebuilders also tamper with the circuitry that reports on the air bag status, when you turn on a car. Bottom line: you can’t count on a warning to alert you the air bags are missing, or the electronics that control them are corroding due to flood damage.

How can you make sure any used car you’re considering still has all the air bags intact? Insist on having a trusted, reliable independent auto technician check out the car, including checking all the air bags, before you buy. This report shows what can happen if you don’t get a vehicle inspected first:

WOOD-TV 8 Grand Rapids, Michigan– do the air bags on your used car work?




Car Title Loans — Legalized Auto Theft?

Need cash in a hurry? Own your own car? Watch out for companies that advertise they’ll give you a loan, in exchange for the title to your car. They’re known as “car title lenders.” They charge wildly exorbitant interest rates — sometimes 185% or more. Worst of all, they tend to use tricks and traps, to take away your car. For example, they may demand payments in person, on a specific day. When you go to the store to pay, they spring the trap. They are closed. Next thing you know they have seized your car.

Or they may have a clause hidden in the fine print that says if you move, you have to notify them by mail — or they can repossess your car. So even if you make your payments after you move, and they know exactly where you are, if you didn’t give them written notice, they can take your car.

California Assemblymember Roger Dickinson is trying to improve protections for consumers who resort to car title loans, in a pinch. He authored a bill to cap the interest rate on car title loans at 36%. Florida already enacted a similar law, after military Servicemembers and their commands testified about the harmful impact of shady car title lending practices on military personnel and their families.

However, the car title lending industry fought back in California, and the bill was watered down to require prominent disclosure of the interest charges, instead of capping them. Plus it would require car title lenders to check consumers’ creditworthiness and use responsible underwriting guidelines, and prohibit them from reporting negative information to credit reporting agencies.

Sederia Lewis of Oakland CA testified at the Capitol in Sacramento, in support of Dickinson’s bill. Her written testimony stated the following:

Good afternoon. My name is Sederia Lewis. I live in Oakland. I want to thank Assemblymember Dickinson for authoring this bill. I lost my car and thousands of dollars because of predatory car title lending practices. This has been a real hardship for me, especially since I am disabled, and it’s often hard to get to work and to medical appointments.

I knew that I needed safe, reliable transportation. So I purchased a new 2007 Lexus. I paid over $37,000 in cash. I planned to own that vehicle for 10 years or more. No matter what else was going on, I kept it well maintained. That car was my lifeline.

When my husband and I split up, I needed to get established on my own. I needed cash to tide me over and meet immediate expenses. I went to a cash advance store, and when they found out I owned my own car, instead of giving me a loan, they told me I should contact 1-800-Loan-Mart.

At the time, my main source of income was Social Security disability payments, in the amount of about $800 a month.

On June 30, 2008, I went to the Loan Mart office in Encino. I wanted to borrow $3,500. The salesman tried to talk me into borrowing more — $5000. I told him no. I asked him how much the interest would be on the loan. He didn’t tell me. He just said it was “only simple interest.” I asked him how much it would cost to pay off the entire loan, and he said it would be a total of $4,515. That sounded reasonable to me, so I agreed to the loan. He gave me a document to sign, without showing me the interest rate, and I believed him that it reflected our agreement.

It was only later on that I found out that the real cost of the loan was going to be $13,383 and that the interest rate was 91.86%. That’s ridiculous. If I had known the interest rate was that high, I would never have agreed to the loan.

My monthly payment was $383. I made several payments, then missed one, and then made more payments. In December of 2008, I made two payments, both for $383. But the amount past due and the penalties kept adding up. In January, I received a billing statement from Loan Mart that said the total due by January 28 was $1,222.

But I didn’t even get a chance to make that payment. That’s because on January 19, my car was repossessed. With no warning. I thought at first it was being stolen. Then they sold my car at auction.

According to an attorney who researched my case, the Blue Book price for my car, at auction, should have been about $22,000. But Loan Mart sold it for just $16,500. On top of that, Loan Mart charged me an extra $460 for the repossession, and another $422 for a key. For a car that was worth more than $25,000 at retail, if I had been able to sell it myself, I got just $9000.

That small car title loan — which they said would cost me just $4,515, instead cost me my car, plus more than $7000 in direct losses. It cost me my mobility, and my main means of looking for work. I now also have a repossession on my credit report, which makes the price of credit for everything skyrocket.

I think there should be caps on the interest car title lenders can charge. 36% is plenty. At the very least, they should be required to adopt more responsible lending practices.

Assemblymember Dickinson’s bill is a significant step in the right direction, and I urge you to please vote AYE.

Thank you.

The CEO of 1-800 LoanMart appeared and testified against the bill, claiming the loans are better than going to a loan shark. As one title lender told the Los Angeles Times, “At least we don’t break legs.” Despite Sederia’s testimony, and support from CARS, the bill failed to pass. As a result, consumers in California who have fallen on hard times and get car title loans still face sky-high interest rates and risk losing their only means of getting to work or medical appointments.

What can you do to avoid falling into the car title loan trap? First, join a credit union. Don’t wait until you need an emergency loan.  Work with them to improve your credit. Most credit unions offer classes and personal assistance with credit-building.

If you do need an emergency loan, ask your credit union to consider a small loan at a much more reasonable interest rate. In general, credit union loans are capped at 18% interest — making them much more affordable than an 185% interest loan — without risking your car.

Another option — find out how much your car is worth, using a guide such as Kelly Blue Book, Truecar, or Cars.com. Consider whether you may be better off selling it and buying a less expensive vehicle. If you are going to lose your car anyway, you are better off selling it yourself, instead of having it repossessed by a car title lender.

Read more:

“Title loans’ interest rates literally out of control — Los Angeles Times, February 8, 2011

Did a car title loan company try to scam you or take your car?  CARS is working to reform car title lending practices, and we want to hear from you. Here’s where to contact us:

Contact CARS





Buyer beware — odometer fraud on the rise

Think that odometer fraud is a crime of the past? Digital odometers were supposed to make altering a car’s mileage harder. And they did – for a while. But new gadgets for turning back odometers are now available on the internet — and shockingly easy to use.

An eye-opening undercover investigative report by CBS channel 2 in Los Angeles shows how it’s done — in a scam that has attracted the attention of authorities.

“CBS 2 investigation uncovers odometer fraud possibly affecting thousands of consumers”

Odometer fraud remains a serious crime in the U.S., robbing consumers who pay thousands more than a car is really worth. Plus they face costly repairs they didn’t anticipate. Adding insult to injury, warranties are usually void on vehicles with altered odometers. So even if you buy a car that was sold with a warranty, you may be stuck paying out of pocket for repairs.

How can you avoid odometer fraud? Vehicle history reports don’t always capture mileage discrepancies. So be sure to get a reliable auto mechanic to thoroughly inspect any used car you’re interested in buying, before you agree to anything. An altered odometer may register a trouble code that a qualified mechanic can detect, using specialized diagnostic equipment. Also insist on seeing all the work orders for past repairs, and contact the repair shop to confirm the mileage.

The average mileage for most cars is around 12,000 a year. Be especially suspicious when sellers claim a car has significantly lower mileage.