What is my credit score? It sounds like a pretty simple question, doesn’t it? Most people are only vaguely aware of what their credit score is. The consumer may know she has good credit or maybe not-so-good credit, but few know the actual score. Unscrupulous car dealers can use this lack of knowledge to their benefit. If a potential buyer comes into a dealership and expresses interest in buying a car at some point the buyer’s credit score may be checked. The finance department may say that due to the buyer’s poor credit score the loan can only be made at a higher than typical interest rate.
From the perspective of the buyer higher interest rates on the same loan amount mean that the loan payments will be higher or that the term of the loan will be longer. Higher interest rates cost consumers hard-earned money. Higher interest rates can mean that the dealership and the finance company make more money on the deal. Some dealers may engage in fraud to get you to agree to higher than necessary interest rates.
You may have had some late payments due to personal situations like ill health, divorce, or being laid off. Late payment histories may negatively affect credit scores. On the other hand, the dealer may be misleading you to generate higher payments and extra profit. Information is power, check with the three primary credit-reporting agencies before shopping for a car or any large purchase that will be made on credit. If you know what your score is you will be less likely to be misled by incorrect information from a salesman. The three primary credit reporting agencies are Experian, Equifax, and TransUnion. You may be asked to pay a small fee to get your credit scores.
The Law Office of Julie Johnson is dedicated to the protection of consumer rights. If you have been victimized through questionable dealer practices please feel free to contact us.
Imagine. You visit a car dealership preparing to make one of the most important purchasing decisions of your life. You have your eye on a used car and the salesperson tells you that it is in “perfect condition,” and the odometer reads 10,000 miles. Based on this information you buy the car only to find out later on that the odometer had been rolled back from 80,000 miles, and the car had been restored from a severe car accident. For a long time, there was no law in Texas to protect consumers from these kinds of misrepresentations. Caveat emptor was the rule, and if you bought this car under false pretenses you would be out of luck. This changed in 1973 when the Texas legislature passed the Texas Deceptive Trade Practices – Consumer Protection Law (DTPA). The purpose of the DTPA is to “protect consumers against false, misleading, and deceptive business practices, unconscionable actions, and breaches of warranty and to provide efficient and economical procedures to secure such protection.”
Even though the DTPA has gone through revisions that have weakened the statute, it remains one of the best laws for Texans. The DTPA’s most innovative feature is that other consumer protection statutes “tie-in” to the DTPA, allowing consumers to sue not only under the DTPA, but they may proceed under the DTPA for violations of these other statutes as well. So the DTPA has the incredible effect of actually strengthening the protections of other statutes. In fact, the DTPA is at its most powerful when utilizing this tie-in feature, because while the DTPA itself authorizes recovery of all “economic” damages when proceeding under a tie-in statute, consumers can recover all “actual” damages, a much broader category of damages.
Another exciting feature of the DTPA is its trebling mechanism, which acts as a powerful deterrent for companies to deceive consumers in the future. If a consumer proves a violation of the DTPA, the first $1,000 of the consumer’s damages are automatically trebled. The consumer’s damages in excess of $1,000 may be trebled as well if the consumer can prove that the seller acted “knowingly.” In addition to potential trebling of the prevailing consumer’s damages, the DTPA also requires the seller that violates the DTPA to pay the consumer’s attorneys’ fees incurred in bringing the DTPA action.
The Law Office of Julie Johnson provides representation to those who have been victimized by a business deceptive dealings. Inquire for a free consultation.
A yo-yo is a simple toy that when handled correctly returns to the hand of the person using it. Unfortunately, there is another common meaning for the term yo-yo. This kind of yo-yo refers to the practice of certain car dealers when they approve financing on a vehicle, and then turn over possession of the car to the new proud owner. A week or so later the car buyer learns for the first time that there is some problem with the financing and that they need to bring the car back to the dealer. The dealer jerks the string and the car yo-yo’s back to them. When the car buyer may be told that car financing did not go through and that a new sales agreement must be signed. Not surprisingly, these new agreements often have different terms such as a higher interest rate, higher sales price, require a more down payment, or a combination of the above. In a website section pertaining to consumer protection, The Texas Secretary of State recognized this possibility.
“It has been known to happen: the consumer leaves the old car as a trade-in and drives away in the new car with only a verbal agreement about the amount of the monthly payment. The contract just needs final approval – “a mere formality” – by a manager who is not immediately available.
What happens? The buyer’s credit is not approved, the monthly payment will be significantly higher and the trade-in has already been sold. The buyer is stuck with the new car at the higher payment.”
Yo-yo situations may be a sign of fraud by the car dealer. If the initial paperwork does not adequately describe the financing as contingent, if the buyer is told that the deal is done and everything is “fine”, fraud or other deception may have occurred. A dealer may say that it could not sell the financing contract and thus it is revoked. Generally, any finance agreement can be sold, perhaps just not for the level of profit the dealer would like. Yo-yo style deals may indicate a breach of contract, fraud, and violations of state and federal law.
Depending on the situation, and the documents that were signed at the time the car was originally delivered, the buyer may have valuable remedies including rescission (the complete undoing of the deal), breach of contract damages (the difference in the original contract terms versus the new contract terms), attorney’s fees and, in some cases, punitive damages (damages assessed against the wrongdoer to punish it for its behavior and to deter similar acts in the future.).
The Law Office of Julie Johnson is dedicated to the protection of consumer rights. If you have been victimized through questionable dealer practices please feel free to contact us.