As if it wasn’t bad enough that car dealers are exploiting new and used car buyers by engaging in price-gouging during a pandemic. Making their customers’ lives even worse, some dealers and lenders are also illegally repossessing their cars. That’s so they can resell them and make another killing by exploiting someone else.
But the pro-consumer folks that President Biden appointed to head up the Consumer Financial Protection Bureau have noticed. They just announced they’re cracking down on illegal auto repossessions. Some of the practices they identified are:
“Illegally seizing cars: Servicers are repossessing vehicles from borrowers who made payments sufficient to stop the repossession or who entered a payment plan. Given the high level of harm caused by wrongful repossessions, servicers must ensure that every single repossession is valid.
Sloppy record keeping: Incorrectly coded records or agents failing to talk to their colleagues about canceling repossession orders hurts consumers and is a violation of federal law. Servicers need to ensure proper communication between them and any third-party processing a repossession.
Unreliable balance inquiries: Inaccurate balances can lead to a borrower paying less than a sufficient amount to avoid delinquency, resulting in a repossession. People are also having their vehicles repossessed because their loan payments are processed in a different order than what they had been told.
Ransom for personal property: Servicers are still holding personal property found in repossessed vehicles hostage until the property owner pays a fee, a practice the CFPB has been cracking down on for years.”
Get legal advice from an attorney who specializes in representing victims of auto fraud. Be sure to ask if they are willing to represent you on a “contingency” basis, or at no cost to you. Here’s a good resource for finding an auto fraud expert in your state, by contacting the National Association of Consumer Advocates.
How can you avoid becoming a victim of an illegal repossession?
#1 Join a local credit union and get pre-approved for a loan BEFORE you shop for a car. Most credit unions are not as crooked as the big auto lenders tend to be.
If you can defer buying a car, save up and pay cash.
Consider buying your car from another consumer, instead of a car dealer. That way, you can save a LOT of $$ and also avoid a lot of hassles, like having your car basically stolen and your personal property held hostage.
Here are CARS’ tips for how to get a good deal on a nice, safe, reliable used car — while telling crooked dealers and lenders “Bye-Bye”!!
Popular video about this auto lending scam: Comedian and news commentator John Oliver reveals how car dealers and lenders engage in “churning” — buying overpriced cars that often break down soon after purchase, repossess them, and resell them again and again, making a huge profit each time. At the expense of honest, hard-working car buyers.
Car dealers are also price-gouging consumers over the price of used vehicles, and routinely selling them dangerous unrepaired recalled used vehicles without bothering to get the safety recall repairs done first — even though federal law requires auto manufacturers to provide safety recall repairs for free, for at least 15 years from when the recall is issued.
Car dealers often downplay the risks posed by safety recall defects. Don’t fall for it. Your life is precious, and if you’re paying top dollar to a professionally licensed car dealer, you deserve to get a car that is at least free from deadly defects, like brakes that fail, catching on fire, steering wheels that come off in the driver’s hands, sticking accelerator pedals, and faulty airbags that propel shrapnel into the passenger cabin, causing severe or fatal injuries such as blindness, or bleeding to death.
Car dealers are bragging in the automotive press about how their profits are also going through the roof. Billionaire investors like Bill Gates and Melinda French Gates — who are heavily invested in the AutoNation dealership chain, and Warren Buffett, whose Berkshire Hathaway conglomerate owns multiple car dealerships outright — are making vast profits by ripping off new and used car buyers, selling unsafe vehicles, and exploiting the computer chip shortage.
Some states have laws against price-gouging, but don’t hold your breath waiting for your state’s attorney general to protect you. Car dealers are so politically active and well-connected, they hardly ever get sued by public law enforcement agencies, no matter how blatantly they violate the law.
So what can you do to avoid falling prey to greedy car dealers? Many car buyers are purchasing vehicles from other consumers, who don’t have to pay for advertising, overhead, and glittering, impressive structures. or attract investment capital. Other consumers also don’t impose forced arbitration clauses on car buyers — unlike car dealers, who typically refuse to sell you a car unless you first surrender your Constitutional right to fight back in court, if they violate the law by committing fraud, rolling back odometers, falsifying loan applications, selling unsafe junkers or flood cars, selling cars that they don’t even own, or engaging in other crooked practices.
You can save a LOT of money by buying a car from another consumer, instead of being ripped off by a greedy car dealer. But you still have to be careful. Some con artists pose as private sellers, when in fact they are unlicensed dealers. They may tell you that they’re selling their own car, or their cousin’s car, when in reality that got that potential deathtrap on wheels from an auto auction, after it was rejected by another consumer and other dealers decided they didn’t want it on their car lot.
Here are tips from experts about how to get a good deal on a safe, reliable used vehicle, by taking control of the transaction yourself and buying from another car owner. This step-by-step process takes some time, but it can save you tons of $$ — and potentially save your life, and the lives of those you love.
Wishing you and your family safe, happy motoring, and freedom from price-gouging, inflation-fueling greedy car dealers!
At a time when the price of used cars is skyrocketing, and many people are flocking to buy used cars to reduce the risks of exposure to Covid posed by public transportation, are consumers getting what they are paying for?
Unfortunately, many of them are being cheated, to the tune of thousands of dollars. Their lives are also often at risk, and tragically, some used car buyers and their families and friends are being injured or killed.
According to the Consumer Federation of America’s 2021 Annual Nation’s Top 10 Consumer Complaints, auto transactions top the list, leading to more consumer gripes to state and local consumer protection agencies than any other product or type of transaction. It’s been the same for a long time, year after year.
These days, American car buyers are paying more, and being treated worse.
Car dealers routinely rip off consumers in numerous ways. Like:
Advertising cars at one price — then after you are on the lot, charging double, or more, particularly if the dealer employs “e-contracting”
Forging signatures on documents
Selling junky cars that break down soon after you buy them
Selling cars that fail to pass emissions tests, and pollute the air we breathe
Selling dangerous cars that they know were severely wrecked, while claiming they have a “clean Carfax” so they must be OK
“Loan packing” — charging thousands of dollars extra for high-profit items such as worthless service contracts, GAP, theft etch, and other unwanted stuff
Overcharging for financing, in exchange for kickbacks from auto lenders
Racist financing and discriminating against people of color
Repossessing cars, even when the buyers are making all the payments in full and on time — basically, a form of car theft
Selling stolen vehicles
Selling cars with altered odometers, and lying about how many miles they’ve been driven
Charging bogus, inflated “document fees” or “concierge fees”
Yo-yo financing — getting you to sign a contract to buy a car on good terms, then after you drive off the lot, telling you that the contract isn’t valid, or the financing “fell through,” and demanding more — sometimes under threat of arrest for “auto theft”
All of those scams are costly and risky for car buyers, especially car buyers who are from communities of color.
But the absolute worst car dealer rip-off of all is charging consumers extra for dangerous, potentially deadly unrepaired recalled cars.
It’s not only corner car lots who are foisting off seriously defective deathtraps onto used car buyers, for top dollar. It’s also huge conglomerates like CarMax and even their competitors at online “disrupters” Vroom and Carvana, who all claim their vehicles have passed a thorough inspection, but fail to get the free repairs done to fix hazardous safety recall defects that maim or kill people.
How can a car that is so defective, it’s prone to catching on fire while parked in your driveway, pass any inspection? Or a car with bad brakes that fail? Or with a steering wheel that may come off in your hands? What kind of inspection is it, that fails to catch and fix the safety defects that are likely to kill you?
Making this outrageous scam even worse, the perpetrators of this scam claim they “disclosed” that the vehicle had an “open recall,” attempting to shift the blame — and any legal liability — onto their victims. Of course, they know that hardly anyone reads those “disclosures,” especially when they’re hidden in a huge stack of 30 + documents that you have to sign.
And of course, the “disclosures” are usually only in English, and don’t really convey what’s at stake. There’s no skull and crossbones. Just a lot of long-winded, legalistic jargon.
Please don’t fall for this scam. Be sure any car you buy is actually safe, before you drive it away.
Best of all, don’t even set foot on a car dealer’s lot. Experts are sharing their 12 step-by-step tips for how to buy a safe, reliable vehicle that’s free from deadly safety recall defects, for a lot less than a car dealer would charge: 12 Easy Tips from auto experts
Stay safe and save not only your $$, but also your life!!!!!
According to news reports, Miami-Dade police recently arrested a used car dealer and charged him with rolling back the odometer on a used 2101 Mazda CX9, erasing more than 81,000 miles.
Electronic odometers were supposed to make it harder for car dealers to cheat used car buyers by lopping miles off odometers. But the switch to electronic odometers just spawned a black market in odometer-tampering tools that are cheap and easy to buy online.
The multi-billion $$ fraud continues to plague used car buyers. In fact, it’s ridiculously easy for crooked car dealers to engage in odometer fraud, with little fear of getting caught.
The National Highway Traffic Safety Administration is tasked with policing odometer fraud, but the agency is chronically understaffed and under-funded, and seldom acts unless they find a widespread pattern of illegal rollbacks.
One of the worst impacts of odometer fraud: victims of the illegal practice often end up having to pay out of pocket for expensive, unanticipated repairs that can leave them deep in debt or without a car.
A double whammy — even if you buy an extended service contract, they usually exclude coverage for vehicles with altered odometers.
How can you avoid falling prey to crooked car dealers who alter odometers? Check out CARS’ tips for how to get a good deal on a safe, reliable used car, without having to set foot on a car dealer’s lot.
The FTC announced today that the agency has” reached an agreement with Richard Berry, the owner and manager of a group of bankrupt auto dealerships in Arizona and New Mexico, to resolve charges that he and the dealerships deceived consumers and falsified information on vehicle financing applications. Many of the affected consumers were members of the Navajo Nation.”
According to Samuel Levine, Acting Director of the FTC’s Bureau of Consumer Protection, “When Berry’s auto dealerships falsified income and down payment information to qualify people for loans they couldn’t afford to pay back, they set people up for failure – including default, repossession, and ruined credit. That’s why the FTC sued Berry and his dealerships.”
In a news release, the FTC stated the following:
The FTC reached an earlier settlement with the four dealerships: Tate’s Auto Center of Winslow, Tate’s Automotive, Tate Ford-Lincoln-Mercury, and Tate’s Auto Center of Gallup. If approved by the district court, the present settlement against Berry, would result in a $450,000 payment to the FTC and conclude the FTC’s case.
The FTC’s complaint, filed in August 2018, alleged that the defendants falsified consumers’ income and down payment information to get vehicles financed and engaged in unlawful advertising. In an earlier ruling in the case, the judge found that the defendants violated the Truth in Lending Act (TILA) and Consumer Leasing Act (CLA) by failing to disclose legally required information in their advertisements.
In addition to the $450,000 payment, the proposed settlement prohibits Berry from misrepresenting information in documents associated with a consumer’s purchase, financing, or leasing of a motor vehicle, and misrepresenting the costs or any other material fact related to vehicle financing. The proposed order also requires Berry to provide consumers sufficient time to review and obtain a copy of the relevant vehicle financing documents and prohibits him from violating the TILA and CLA.”
Unfortunately, this is not an isolated case. Car dealers are notorious for targeting people of color — including indigenous Americans, recent immigrants, and others they consider vulnerable — and cheating them, causing severe hardship and sometimes homelessness when their victims lose their only means of transportation to work / schooling / child care / medical care.
How can you avoid falling prey to a predatory auto dealer? Don’t even go there. Here are CARS’ tips for how to navigate the private market, and avoid the headaches and heartaches of buying at a “stealership.”
Since 2015, auto manufacturers have recalled more than 26.5 million vehicles due to defects that can cause them to burst into flames. Some manufacturers recommend that the owners park the cars outside, where they may be less likely to burn down homes. Recently, General Motors warned owners of 2017 – 2019 Chevy Bolts with faulty batteries they should park them outside, after battery fires erupted in Bolts.
But beware: if you buy an unrepaired, recalled firebomb car from a car dealer like CarMax, and it catches on fire and burns down your home, or destroys a whole town, they will try to pin the blame on you.
This is a lesson that Californian Anthony Santos found out the hard way, after a Ford F-150 pickup he purchased from CarMax caught on fire in his driveway and caused over $200,000 in damage to the pickup, his garage, and his home. Fortunately, he and his children were able to escape the flames.
Before he bought the pickup from CarMax, Ford had issued a safety recall because the truck had a dangerous defect that made it prone to catching on fire without any warning.
CarMax failed to get the FREE safety recall repair done before selling the pickup to Mr. Santos. Despite neglecting to get the repairs done, CarMax advertised that the pickup had passed CarMax’s “125 point inspection.” This of course would lead car buyers to believe that it must at least be safe and free from known, hazardous safety recall defects.
After the truck caught on fire, CarMax tried to pin the blame on Mr. Santos for not finding out about the recall, taking his truck to a Ford dealership, and getting the safety recall repair done himself. Mr. Santos fought back and sued CarMax, but eventually the huge, publicly traded auto dealership chain won, on a technicality.
Bottom line: Buying cars from CarMax is risky, especially if you live where there’s a serious threat of wildfires.
P.S. Another hazard: Sometimes car buyers have experienced lengthy delays in getting safety recalls fixed, due to severe shortages of repair parts. CARS has heard from unfortunate car buyers who ended up waiting over a year for a repair. Meanwhile, they were afraid to drive their own cars. In some states, legislators have introduced bills to make driving your own car illegal, if the safety recall repairs haven’t been done.
You work hard for your money. You have better things to do with it than give it away to a greedy, conniving car dealer. But if you shopped at an auto dealership last year, chances are you paid too much. By a lot.
Car dealers across the nation are crowing about the record-breaking profits they’re making during the pandemic. Their fat profits are being fueled by people who are flocking to buy cars — understandably fearful about taking public transportation, flying in airplanes, or using ride-shares or other modes of transportation where they risk being in an enclosed space with others who may be spreading the Coronavirus.
According to Automotive News, “AutoNation, of Ft. Lauderdale, Fla., hit a record-high quarterly F&I [Finance and Insurance] profit per vehicle retailed on a same-store basis with an average of $2,172, an increase of 12 percent, or $240, from year-ago figures.”
AutoNation is publicly traded on Wall Street. They operate over 315 new car dealerships nationwide. Over the years, their biggest investor has included an entity affiliated with Microsoft founder Bill Gates, one of the wealthiest men in the world.
Keep in mind that $2,172 is just AutoNation’s profit on the financing and insurance products they foist off on consumers. They also profit handsomely on the price of the car itself.
Imagine what you could do with $2,172. Maybe feed your family for months. Pay college tuition and get a better job. Get a much better vehicle you really like, that’s friendlier to the environment and safer for you and your family.
Plus — something AutoNation apparently doesn’t like anyone to mention publicly — they deliberately sell their customers cars with dangerous unrepaired safety recall defects. Especially cars with killer safety defects that you cannot get fixed because there are huge shortages of repair parts.
So if you buy that recalled car, there’s no way you can get it made safe. Sometimes the parts delays can last for months, or over a year. Meanwhile, you are your family are at serious risk of being injured or killed.
Please don’t assume you will have time to get the recall fixed before tragedy strikes. Auto safety defects are like ticking time bombs. In San Diego, four members of one family –a highway patrol officer, his wife, their 13-year-old daughter, and the officer’s brother-in-law — were killed by an unsafe car the same day, just hours after a dealership handed the CHP officer the keys. They were on their way to a soccer match when the fatal defect happened.
If you don’t feel like overpaying for a dangerous deathtrap, please consider buying from another consumer and avoiding car dealers altogether. You still have to be careful, and do your homework. But at least you won’t be stuck dealing with a dealership chain that is out to maximize their profits at your expense.
How can you take control of your car buying experience, and get a good deal on a nice, safe, reliable used car? Check out these step-by-step tips from pro-consumer experts.
Your life is precious. You deserve to get the full value of what you pay for. Stay safe — and save!
According to the FTC, Bronx Honda and its general manager told sales employees to charge higher financing markups and fees to African-American and Hispanic customers. The defendants told employees that these groups should be targeted due to their limited education, and not to attempt the same practices with non-Hispanic white consumers.
The FTC further alleged that Bronx Honda failed to honor advertised sale prices, changed the sales price on paperwork in the middle of the sale without telling the consumer, double-charged consumers for taxes and fees, and misrepresented to consumers that they were required to pay extra reconditioning and warranty fees to purchase ‘certified’ vehicles.
The FTC is providing refunds, averaging about $371 each, to 3,977 victims of Bronx Honda’s practices. Those who receive checks should deposit or cash their checks within 60 days, as indicated on the check. The FTC never requires people to pay money or provide account information to cash a refund check.
Recipients who have questions about the refunds, or consumers who financed a car purchase from Bronx Honda in 2016 through 2018 and have not previously requested a refund, should contact JND Legal Administration at 888-921-0727.”
Unfortunately, such practices are all too common at auto dealerships across the nation. How can you avoid giving your business to a crooked car dealer who is ripping people off, based on their race?
If you’re looking for a new car, your options are extremely limited. That’s because corrupt legislators have granted car dealers a special monopoly on new car sales, insulating them from competition and drastically increasing prices and harmful practices. Just about the only exception is Tesla, and car dealers have been battling against Tesla for years, in many states, to keep them from being allowed to sell new vehicles without car dealers getting to make a killing.
But if you are looking for a used car, you have the choice of buying a car directly from another consumer, eliminating the middleman, saving money, and reducing the risk of being cheated by a professional crook.
You still need to be careful, but if you do your research, find your own financing in advance, and insist on a thorough inspection, you can get a great deal on a safe, reliable used car. Check out CARS’ tips on how to avoid car dealers’ tricks and traps.
Jeffrey Goldberg’s report in The Atlantic, “Trump: Americans Who Died in War Are ‘Losers’ and ‘Suckers,” met with flat denials by the White House. But President Trump’s actions speak louder than his words. In addition to the many other incidents that have been covered by news organizations, where Trump disparaged members of the Armed Forces, and viciously attacked Gold Star families, there’s another action he took, that goes beyond his words to demonstrate an appalling level of contempt for the military community.
If you have any lingering doubt that President Trump treats America’s brave, patriotic military heroes like “suckers,” please consider this:
President Trump ignored the voices of the entire military community and sold out our brave military heroes and veterans to greedy, unscrupulous corporate scofflaws like Wells Fargo that engage in predatory and illegal practices and have a history of preying on military service members, veterans, and their families.
Those predatory, illegal practices often create financial readiness problems that can cause members of the Armed Forces to lose their security clearances, harming their military careers, costing our nation the full benefit of their extensive training and expertise, and jeopardizing our national security.
Pres. Trump even hosted a signing ceremony in the White House with representatives of unscrupulous, predatory banking interests — behind closed doors — to celebrate his shameful, anti-consumer, anti-military act. Then the White House released a photo, showing him surrounded by gleeful GOP representatives of Congress and banking trade associations whose member banks have been repeatedly caught violating state and federal consumer protection laws, scamming their customers and engaging in massive fraud.
His signature means that military service members and veterans are being denied basic, precious Constitutional rights they risk their lives and sacrifice to defend.
Those are legal rights that others — such as car dealers — were granted by Congress, and that President Trump himself has exploited to the hilt, as the most litigious president in U.S. history, while denying the same rights to members of the Armed Forces.
President Trump, Vice President Pence, and Republican Members of Congress killed the Obama Administration Rule That Would have Freed Wronged Consumers, Including Military Service Members, to Fight Back in Court Against Corporate Scofflaws That Rip Them Off
In 2016, The Military Coalition, a consortium of uniformed services and veterans organizations representing more than 5.5 million current and former servicemembers and their families and survivors, spoke up publicly for ensuring access to justice for all, including active duty military service members and veterans.
The Coalition includes familiar household names such as AMVETS, the National Military Family Association, Vietnam Veterans of America, and Iraq and Afghanistan Veterans of America. They united in an effort to help ensure that military service members are free to join forces to defend themselves from illegal acts committed by unscrupulous banking interests, predatory lenders, and crooked debt collectors.
The military organizations urged the Consumer Financial Protection Bureau (CFPB) to finalize a proposed rule to restore the Constitutional right to band together and fight back in an open court of law against corporate lawbreakers who prey on military personnel. Greedy, unpatriotic corporations like Wells Fargo.
Wells Fargo Preyed on Military Service Members
The scandal-riddled bank got caught illegally seizing vehicles from active duty military service members without even bothering to get a court order — a blatant violation of the Servicemembers Civil Relief Act (SCRA).
The SCRA has always enjoyed widespread bi-partisan support. It’s aimed at ensuring that military servicemembers can focus on defending our nation and fulfilling their mission without the stress and distractions posed by financial issues that are often very difficult and time-consuming to resolve, even for consumers who are not serving in a remote location half way around the world, on a submarine or aircraft carrier in the middle of an ocean, or in the midst of a war zone.
During the Obama Administration, federal investigators were alerted about a complaint that a North Carolina member of the Army National Guard, Dennis Singleton, filed with the Army’s Legal Assistance Program. He told the Legal Assistance attorney that Wells Fargo suddenly repossessed his car in 2015, just as he was deploying to Afghanistan to serve in Operation Enduring Freedom. Wells Fargo sold his car at an auction, then sought a deficiency balance of over $10,000 from him and his family — leaving them with no car, trashed credit, and a huge debt.
Under fire from the DOJ, Wells Fargo eventually admitted it had illegally seized over 400 vehicles from active duty troops, without giving them any opportunity to defend themselves in court. The DOJ also charged Wells Fargo with violating the federal law against exceeding the 6% interest rate cap on loans to service members, making them more likely to default. Wells Fargo finally agreed to pay the harmed military personnel $4 million, repair their credit, and refrain from violating those laws in the future.
But there’s more….
Army Staff Sergeant Jin Nakamura was stunned to find out, while he was serving overseas in Operation Iraqi Freedom, that Wells Fargo had seized his 2006 Nissan Altima — even though he had arranged for direct payments from his account before he was deployed to his new duty station.
It wasn’t until later, when Staff Sergeant Nakamura filed a private, civil class action lawsuit on behalf of himself and other service members who were also harmed by the same illegal practices at Wells Fargo, that the cases of over 400 more active duty military personnel came to light. In a shocking display of hutzpah, Wells Fargo was busily ripping them off the same way, and seizing their vehicles, while the DOJ’s investigation was actually already underway.
According to Staff Sergeant Nakamura’s attorney, Bryce Bell, the contract that the Staff Sergeant signed when he bought his car did not include a clause that would have forced him to submit his case to the unfair, rigged system dominated by crooked corporations, known as “arbitration.” So he was free to fight back against Wells Fargo in an open, public court of law. His class action litigation settled when Wells Fargo finally agreed to refund $5 million in compensation the bank owed Staff Sergeant Nakamura and the hundreds of other service members.
That freedom to join forces in order to fight back against such scams, like Staff Sergeant Nakamura did on behalf of hundreds of other brave Members of the Armed Forces, is super-important for active duty military personnel. That’s because they may not be able to fight back at all, if they must act alone — especially if they are serving in a remote location or a war zone.
That freedom was guaranteed by the 7th Amendment of the U.S. Constitution, but radical, controversial decisions issued by Republican-appointed Justices on the U.S. Supreme Court have robbed wronged workers, consumers — including military Servicemembers — and small business owners of their right to fight back in a court of law.
Under the leadership of President Obama’s appointee Richard Cordray, the Consumer Financial Protection Bureau sided with pro-consumer groups and the military organizations, and issued a rule that would have restored that Constitutional right in a major way, freeing victims of predatory lenders and crooked banks to band together and fight back in court. But it was immediately under attack.
Crooked banks, along with Republican Senators and Representatives who benefit handsomely from their campaign cash, cooked up a scheme to kill the consumer watchdog agency’s rule in Congress before it could even take effect. Their goal: to let crooked banks get away with ripping off American consumers — including members of the Armed Forces — with little or no fear of being held accountable.
So the lawbreakers could evade having to face the music in an open, public court of law, where judges and juries are tasked with applying the law, the banks were dead-set on depriving American consumers and military Servicemembers of their Constitutional rights and forcing them to submit to a rigged, privatized “alternative” system dominated by the greedy, lawbreaking special interests themselves — called “forced arbitration.”
“Forced arbitration is an un-American system wherein service members’ claims against a corporation are funneled into a rigged, secretive system in which all the rules, including the choice of the arbitrator, are picked by the corporation. Found in almost every financial services contract, forced arbitration clauses systematically include a provision banning the rights of consumers to band together to hold a corporation accountable. Given the exponential and expansive use of these clauses by financial institutions in contracts with service members, prohibiting the practice of forcing service members to surrender fundamental Constitutional and statutory rights through the use of pre-dispute forced arbitration clauses is now more critical than ever.
Our service members protect our nation against both foreign and domestic threats. The sacrifices and logistical undertakings they and their families make in order to serve are compelling reasons alone to ensure they are not only shielded from predatory financial practices and unscrupulous lenders, but are also able to enforce their congressionally mandated rights through our civil justice system if and when violations arise.
However, class action waivers work against these rights. They are particularly abusive when enforced against service members, who may not be in a position to individually challenge a financial institution’s illegal or unfair practices because of limited resources or frequent relocations or deployment. Furthermore, for those service members on active duty and serving overseas, it is critical to retain the ability to get justice without having to interrupt their service and distract their attention from the mission at hand. Since these types of service members cannot participate full time in pursuing an individual claim, being able to enforce their rights through the class action mechanism is essential. Thus service members should receive the benefits of participating in a class action despite their inability to shoulder the burden of bringing a claim alone.
Our nation’s veterans should not be deprived of the Constitutional rights and freedoms that they put their lives on the line to protect, including the right to have their claims heard in a trial by a jury when their rights are violated. The catastrophic consequences these clauses pose for our all-voluntary military fighting force’s morale and our national security are vital reasons for the CFPB to act quickly to finalize the regulations.”
But instead of siding with The Military Coalition, the GOP sided with the crooked banks and predatory lenders.
The Republican majority in Congress decided to exploit a rarely used law, the Congressional Review Act, to overturn the Consumer Financial Protection Bureau’s rule. That allowed them to undo the rule with a simple majority vote, avoiding a filibuster in the Senate. Using that arcane Act also had the added impact of prohibiting the Consumer Financial Protection Bureau from issuing a similar rule in the future, unless Congress specifically allows the agency to revisit the issue.
The legislation to overturn the rule, House Joint Resolution 111, was hotly debated on the Floor of the House of Representatives. Then-Minority Leader Nancy Pelosi and other pro-consumer, pro-military champions spoke forcefully against the measure. All of the Democrats sided with consumer advocacy organizations and the military, and voted NO. But all of the Republicans, with the lone exception of Rep. Walter Jones, who had served in the North Carolina National Guard, voted AYE, and the resolution passed in the House and moved on to the Senate.
Once again, the resolution was hotly debated. Democratic Senators, including Senator Jack Reed of Rhode Island, a distinguished U.S. Army Veteran, spoke eloquently in defense of preserving the rule. Sen. Elizabeth Warren delivered an impassioned speech on the Senate Floor, blasting the legislation and quoting from letters from military groups, raising their voices for all to hear.
When the vote was taken, all the Democratic Senators sided with the military coalition and voted NO, to preserve the rule. Only two Republican Senators, Lindsey Graham and John Kennedy — both attorneys — voted NO. All their GOP colleagues voted AYE, siding with the crooked banks, resulting in a tie. For a brief time, the future of the CFPB’s rule hung in the balance.
In a historic moment of high drama, Republican Vice President Mike Pence rode to the Capitol to break the tie, arriving on the Senate Floor around midnight. He voted AYE, siding with the crooked banks, and against the military, sending the measure to President Trump’s desk.
To his shame, Republican Senator Chuck Grassley, who had championed the successful effort in Congress to grant car dealers a special exemption from forced arbitration and restore the Constitutional rights of car dealers to have their cases heard in a court of law, voted against restoring those same rights to regular citizens and members of the Armed Forces.
Our nation’s military doesn’t often ask anything from their Commander in Chief. In return for their selfless, immeasurable sacrifice and deep devotion to keeping our nation safe and defeating our enemies, they rarely ask their Commander in Chief for anything in return, other than to have their backs.
But in a rare move, the military community asked President Trump to veto the measure. The American Legion publicly announced their decision to call on him for a veto, declaring:
“The leader of the nation’s largest veterans service organization expressed concern over the loss of financial protections for veterans and servicemembers in the wake of a U.S. Senate late night vote on Wednesday.
Fifty-one members of the Senate voted to overturn a recent Consumer Financial Protection Bureau (CFPB) rule on arbitration agreements intended to provide consumers with an opportunity to sue in court when they have been harmed by financial institutions.
‘Every servicemember and veteran should have the right and responsibility to confront predatory loan practices,”’ said American Legion National Commander Denise H. Rohan. ‘We will not be silent while banks and payday loan shops rip off servicemembers and veterans.’
But President Trump utterly ignored their pleas. Instead, he signed that travesty into law. Among the invited guests who smiled down upon Pres. Trump as he signed the anti-consumer, anti-military measure: GOP members of Congress and a representative of an enormous banking trade association that includes banking interests like Wells Fargo.
Because of the Republican members of Congress, Vice President Pence, and President Trump, scofflaw corporations continue to trample on the Constitutional rights of our military heroes. Crooked banks remain free to force our nation’s military Servicemembers to submit disputes to an unfair, rigged, secretive forum that those special interests dominate — private, mandatory arbitration.
The laws to protect military service members as consumers are often ignored in arbitration. No matter how unfair the decisions rendered by the arbitrators are, there is usually no opportunity to appeal. Given how burdensome and rigged arbitration is, it’s rarely even used for consumer cases.
So whenever President Trump or Vice-President Pence proclaim their supposed fondness and regard for our nation’s military Servicemembers, please keep in mind that when the chips were down, they eagerly, gleefully went out of their way to betray them to their lawbreaking Big Bank buddies.
U.S. Senator Grassley’s statement in support of S 1140, granting car dealers a special exemption, freeing them from forced arbitration:
“While arbitration serves an important function as an efficient alternative to court, some trade-offs must be considered by both parties, such as limited judicial review and less formal procedures regarding discovery and rules of evidence. When mandatory binding arbitration is forced upon a party, for example when it is placed in a boiler-plate agreement, it deprives the weaker party the opportunity to elect another forum.
As a proponent of arbitration I believe it is critical to ensure that the selection of arbitration is voluntary and fair…Unequal bargaining power exists in contracts between automobile and truck dealers and their manufacturers. The manufacturer drafts the contract and presents it to dealers with no opportunity to negotiate…The purpose of arbitration is to reduce costly, time-consuming litigation, not to force a party to an adhesion contract to waive access to judicial or administrative forums for the pursuit of rights under State law…..
This legislation will go a long way toward ensuring that parties will not be forced into binding arbitration and thereby lose important statutory rights. I am confident that given its many advantages arbitration will often be elected. But it is essential for public policy reasons and basic fairness that both parties to this type of contract have the freedom to make their own decisions based on the circumstances of the case.”
While S. 1140 did not pass, auto dealers were given an exemption from the FAA, in order to preserve their rights, thanks to passage of H.R. 2215 in 2002. That act, now codified at 15 U.S.C. section 1226, prohibits auto manufacturers from including any type of pre-dispute arbitration clause in franchise contracts with auto dealers. Specifically, it provides that arbitration may be used to settle a controversy arising out of a motor vehicle franchise contract only if both parties consent, in writing, and only after the dispute arises.
“TEMPE, AZ (3TV/CBS 5) – A Tempe used car dealer arrested Wednesday is facing multiple charges of theft and fraud, accused of cheating clients out of hundreds of thousands of dollars.
Detectives with the Arizona Department of Transportation Office of Inspector General say Farhad Kankash, owner of Onyx Motorsports, allegedly committed fraud against both customers and lenders.
ADOT officials say Kankash had allegedly committed several types of fraud, including failing to provide titles to customers who purchased vehicles, not paying off liens on trade-in vehicles, and defrauding lenders by obtaining multiple loans for the same vehicle.”
Want to avoid being ripped off and having your life ruined by a greedy, sleazy car dealer? Here’s how to get a good deal on a safe, reliable used car without having to set foot on a car dealer’s lot:
When you shop at a car dealership, you shouldn’t have to worry that they’re deliberately selling you a deathtrap. But that’s what many unscrupulous new and used car dealers all over America are doing.
Car dealers keep getting caught selling vehicles with deadly safety recall defects, like faulty brakes, loss of steering, catching on fire, sticking accelerator pedals, and exploding Takata airbags that shoot metal shrapnel into the passenger compartment, causing drivers and passengers to lose their eyesight, suffer brain damage, or bleed to death.
Car dealers coast-to-coast are exploiting the widespread misconception that if you shop at a dealership, they must have gotten any deadly safety defects fixed. Otherwise, why pay extra, if the car is no safer than if you bought it from a stranger who posted it on Craig’s List?
Even highly sophisticated consumers, including Members of Congress and reporters who cover the automotive industry, suffer from this mistaken belief that somehow vehicles are safer if they’re on a car dealer’s lot.
That erroneous belief tends to be even stronger when the dealer claims the vehicle was thoroughly inspected, and when the dealer is a major franchised dealership.
U.S. Rep. MarkWayn Mullin, of Oklahoma, a GOP Member of Congress, stated at a Congressional hearing on auto safety that “I understand the responsibility of the driver. But at the same time, if you buy a vehicle new or used, you assume everything’s perfect on it.”
The former Administrator of the National Highway Traffic Safety Administration, Dr. Mark Rosekind, who was testifying at the hearing on behalf of the Obama Administration, agreed.
“For me, there’s a certain trust the comes with buying a used car from a franchised new-car dealer. I feel I’m not going to get an unsafe car. And it’s worth paying a small premium to know that the vehicle has been inspected and that technicians examined the critical items. Most techs, I believe, would not let a used vehicle go out for sale if they wouldn’t put their own family in it.”
Sadly, that trust is terribly misplaced. As many news organizations have reported, and the CARS Foundation and our research partners at U.S.PIRG and the Frontier Group have repeatedly found, both new car dealers and used car dealers routinely fail to get deadly safety recall defects repaired, even though the repairs are free.
A car dealer in Hartford, Connecticut sold a young African-American man who was buying his first car a 2011 Hyundai Sonata SE with an appalling 11 unrepaired safety recalls. The safety defects included: faulty airbags, bad brakes, stalling in traffic, and other life-threatening defects. He fought back and won a favorable decision in arbitration, including a refund and his attorneys fees.
More reports about car dealers who sell unrepaired recalled cars with deadly safety recall defects:
Click here to see CARS’ tips for how to get a good deal on a safe used car without having to deal with professional crooks who put their short-term profits ahead of your safety, and the safety of your family and friends.
CarMax agreed to pay $1.6 million to settle lawsuits brought by 16 District Attorneys charging the auto dealership chain with illegally dumping hazardous materials at CarMax stores throughout the state of California, for six years, from 2014 – 2020.
According to news releases issued by the District Attorneys, CarMax illegally disposed of solvents, aerosols, automotive paints, clear coats, and other hazardous substances that the company used during the auto body repair process.
CarMax also continues to sell hazardous unrepaired recalled used cars without bothering to get the free safety recall repairs done first, placing its customers and others who share the roads at risk of being injured or killed.