Auto Dealer Fraud in South Carolina

Mike Kelly — Tue, 19 May 2009 18:16:07 GMT

“Auto dealer fraud” is a term that describes deceptive and unlawful practices used by automobile dealers, at almost any stage of the vehicle purchase process – from advertising, to negotiation of vehicle pricing and financing terms. This fraud is plaguing South Carolina and consumers are being taken for hundreds, and often thousands, of dollars.

While a profitable operation is reasonable and necessary, these scams are adding millions of dollars each year to the profits of car dealers at the expense of consumers. South Carolina’s Regulation of Manufacturers, Distributors and Dealers Act provides that dealers shall not engage in bad actions which are arbitrary, in bad faith, or unconscionable. See S.C. Code Ann. § 56-15-10 et seq. Violations of the Dealer Act may occur when dealers pressure consumers into purchasing additional products in the form of extended warranties, guaranteed auto protection insurance (GAP), and car care plans on the premise that such products are necessary to obtain the car or to successfully finance the purchase. These additional products are often unnecessary and such tactics are in clear violation of the Dealer Act.

The Dealer Act provides that consumers who may have been subject to these violations may recover double their actual damages, punitive damages, and reasonable attorneys’ fees. Auto dealer fraud differs from South Carolina’s Lemon Law, which is contained within S.C. Code Ann. § 56-28-10, et seq. While both involve motor vehicles, auto dealer fraud cases are very different from Lemon Law cases. In auto dealer fraud causes, improper tactics used by a car dealer during the vehicle sale process are the focus, while lemon law cases arise from problems or defects with the vehicle itself.

South Carolina’s Lemon Law provides no recourse against a dealer if a new vehicle contains a defect that impairs it use or lowers its market value substantially. Rather, the manufacturer is provided with the opportunity to repair the vehicle. If repair attempts fail, the consumer is then required to participate in any arbitration procedure proposed by the manufacturer before a refund is possible. Furthermore, the Lemon Law does not cover any defects that do not show within the first 12,000 miles of the vehicle, or the first 12 months, whichever occurs first.

Public Citizen, a national non-profit public interest organization, provides the following tips to avoid falling prey to auto dealer scams:

1) Never take “spot delivery” of a vehicle – do not drive it off the lot until you are absolutely sure that the financing is done and sealed. Shop during the weekdays when banks are open and be sure that the loan is approved by a bank in its final form before driving away with the vehicle. Most importantly, do NOT sign any form which allows a dealer a “right of recission” to change loan terms after you have taken possession of the vehicle.

2) Shop for the best loan (and loan terms) as carefully as you shop for the best sticker price. Shop around for the best deal and be sure of: 1) the exact number of payments; 2) the total cost of your credit in dollars; 3) the name, address and contact information for the bank that holds the loan; and 4) whether there is a balloon payment at the end.

3) Collect a second opinion on the loan and be ready to use outside financing from a credit union or bank. Before you buy, ask a credit union or your bank what a loan for that vehicle would cost. Also, get a copy of your credit report from a rating agency, and know where you stand. Compare the dealership’s offer with your independent loan. If the independent loan is preferable, do not tell the dealership that you have arranged for other financing until after you have negotiated the sticker price and are on the verge of closing the deal.

4) Make a budget and stick to it. Before you go to the dealership, use what you know about the sticker price and loan to figure out the monthly payment and loan schedule you can afford.

5) Plan to go away and come back several times before you buy. Stop the transaction if you feel pressured or confused. Just walk away, and stick to your guns.

For more information, please visit www.autodealerscam.org

Originally posted at InjuryBoard by Mike Kelly

Tort Reform: An Attack On Consumer & Constitutional Rights

Mike Kelly — Fri, 01 May 2009 09:00:00 GMT

South Carolina Senator Larry Martin recently introduced Bill S.350, which seeks to provide limits on the award of non-economic and punitive damages in personal injury actions. The bill seeks to limit non-economic damages (pain, suffering, and loss of enjoyment of life) to $350,000 in all personal injury actions, regardless of the separate causes of action on which the claim is based. A total cap of $1,050,000, regardless of the number of defendants, would also be implemented. To “cap” it all off, punitive awards would be limited to three times the actual award or $250,000, whichever is greater.

This reform goes too far too fast, especially considering that South Carolina passed tort reform only 5 years ago. While the State of South Carolina needs to encourage business, there has to be a balance. This bill reduces corporate responsibility and erodes the duty to take reasonable care to avoid doing harm to others.

The Truth about the Constitutionality of Tort Reform

Tort Reform raises serious and fundamental challenges to the role of the jury in the administration of justice and protecting American freedoms. Tort Reform continues to chip away at our Amendment VII constitutional rights. Such reform essentially guts the Seventh Amendment, which reads: “In suits at common law, where the value in controversy exceeds twenty dollars, the right of trial by jury shall be preserved.” These proposed arbitrary caps on damages allow corporations to plan and budget for their own irresponsibility more effectively.

The use of lawsuits to compel improvements in product safety has historical underpinnings as a fundamental concept dating back to centuries-old common law, and the U.S. civil justice system. Industries need incentives to improve their practices and the safety of their products. It has been an American tradition that a primary source of that incentive comes from the imminent possibility of litigation.

Tort reform advocates seek to limit the rights and protections our Constitution provides to those who are injured from defective products, toxic chemicals, medical malpractice, etc. As a result, the independence of our nation’s individualized system of justice and democracy is directly challenged. The American jury system epitomizes our democracy by allowing common citizens to decide winners and losers. Common citizens, unlike legislators and judges, are typically not influenced by big business.

Thomas Jefferson, principal author of the Declaration of Independence, and third President of our country, had this to say about our constitutional right to a jury trial: “But there are certain principles in which all agree, and which all cherish as vitally essential to the protection of the life, liberty, property, and safety of the citizen:…Trial by jury, the best of all safeguards for the person, the property, and the fame of every individual…” – Thomas Jefferson. Jefferson went on to declare that “I consider trial by jury as the only anchor ever yet imagined by man, by which a government can be held to the principles of its constitution.”

Justice John Marshall proclaimed in Marbury v. Madison that: "The very essence of civil liberty certainly consists in the right of every individual to claim the protection of the laws, whenever he receives an injury. One of the first duties of government is to afford that protection.”

Tort reform limits redress and favors perpetrators of harm – a class with disproportionately high transient political power – over victims of harm. Furthermore, tort reform has demonstrable disproportionately harmful effects on women, children, and the elderly. See Lucinda M. Finley, The Hidden Victims of Tort Reform: Women, Children, and the Elderly, Emory Law Journal, Fall 2004.

Do not let tort reformists, big business and corporations attack our fundamental rights by misleading accounts of jury trials and its propaganda war on individual rights. Bill S.350 will further eliminate corporate accountability and appears to put a price on South Carolina consumer safety.

Originally posted at InjuryBoard by Mike Kelly

Florence-Myrtle Beach Personal Injury Lawyer - Consumer Law

Auto Dealer Fraud in South Carolina

Tort Reform: An Attack On Consumer & Constitutional Rights