According to a study by Bankrate, there are more than 272.4 million privately owned vehicles in America and more than 91% of all households have access to at least one vehicle. A recent consumer report showed 87% of Americans dislike traditional car shopping and many people would rather do their taxes or get a root canal than face a car dealer. As an auto fraud attorney, I’m passionate about helping consumers who have been deceived by predatory dealership scams.
Consumer protection laws like the Truth in Lending Act (TILA) were enacted to address these situations. However, innocent buyers still fall victim to creative auto dealer fraud. At Schlanger Law Group, we recently filed a lawsuit on behalf of a married couple who fell victim to a car dealer’s deceptive practices and misuse of a digital signature pad.
A Clear Example of Bait and Switch Deception
In 2021, the couple (we’ll call them The Johnsons) saw an ad for a used car on Carfax.com. A 2018 Nissan Sentra was listed for sale with a price of $10,995. The Johnsons went to the dealership to see the car, but the salesman told them after taxes, fees, and other costs the total price would be more than $17,000 and they would have to pay a down payment as well.
The Pressure Begins…
Initially, the Johnsons paid $5,500 down so the price should have been reduced to $11,500. The salesman then suggested an extended warranty, which the Johnsons refused. The finance manager calculated the interest rate and monthly loan payments which turned out to be more than the Johnsons wanted to pay each month. They were told if they put more money down and extended the loan term, the payments would be within their budget.
The Heat is Turned Up…
The dealership would not accept the additional down payment by credit card, so Mrs. Johnson reluctantly withdrew $3,000 cash from her bank to cover the down payment. The manager then presented a digital signature pad to the Johnsons to complete the transaction. The Johnsons could not read the loan agreement on the digital device and could not see the manager’s computer screen to verify the terms of the loan.
The dealer handed them the keys and placed a sealed envelope in the car’s glove compartment. The following day, the Johnsons opened the envelope and found some of the loan documents. However, the Retail Installment Contract (RIC) was missing the page that itemized the loan costs and how much they paid for the down payment.
The Dealership Refuses to Make Things Right… It’s Time to Contact an Auto Fraud Attorney
The Johnsons requested the missing RIC page, but the dealer refused to provide it. The loan was sold to a finance company that provided the missing information. The Johnsons realized the total sale price was inflated to $23,854, they were charged for the extended warranty they refused, and they only received credit for a $6,000 down payment, not the $8,500 actually paid. The dealer refused to meet with the Johnsons or correct the mistakes.
At this point, the Johnsons turned to Schlanger Law Group for help.
The Truth in Lending Act Requires Lenders to Provide Loan Cost Information
Unfortunately, the Johnsons’ story is a common tale. As a consumer protection and auto fraud attorney, I have dealt with digital signature fraud scenarios where auto dealers have a buyer sign an iPad-type signature pad and apply that signature to multiple documents that were never presented to the buyer. I’ve also faced unscrupulous dealers that change the terms of the car loan, add warranties never requested, and otherwise increase the cost of the purchase without the consumer’s knowledge or authority.
These acts are illegal under TILA, which has powerful remedies that can help turn the tables on unethical car dealerships that fail to disclose loan terms and hide the costs of financing. These remedies include not only actual damages—for example, the amount of the overcharges—but also significant statutory damages and mandatory attorneys’ fees and costs for the prevailing consumer. When car buyers are tricked or coerced into signing something they can’t read or a loan document that includes terms they didn’t authorize, Schlanger Law Group may be able to help. We often represent auto fraud victims on a contingent basis, receiving compensation for our work only if we are successful
How to Protect Yourself When Asked for a Digital Signature
Many types of businesses use digital signature pads to complete transactions quickly and effectively. However, electronic signatures can be misused by identity thieves or unsavory commercial parties. If you are requested to give a digital signature, here are a few ways to protect yourself.
- Read the entire document you are signing before you sign,
- Carefully review the terms of the agreement including:
- The initial sale price,
- Your interest rate,
- The length of the loan (how many months/years),
- Any down payment credited toward the sale price,
- Additional costs such as warranties, and
- The total amount you will pay to receive a clean title
- Request and receive a paper copy of the agreements immediately, and
- Review the written document and notify the car dealer or finance company about any discrepancies as soon as possible. Keep the hard copy since it may be important to prove your agreement if any of the terms are later changed without your knowledge.
If You are a Victim of Predatory Auto Financing, Turn to an Auto Fraud Attorney at SLG
As an experienced auto fraud attorney, I have handled many digital signature-pad fraud cases, including claims against vehicle dealerships and auto finance companies. We filed a suit on behalf of the Johnsons requesting actual, statutory, and punitive damages along with attorney’s fees and costs. We look forward to presenting their case to the Court and making the dealership correct the transaction and answer for its misconduct.
If you have been defrauded by an auto dealership, auto finance company, or other business that used your digital signature in an unauthorized way, we may be able to help. Call (212) 500-6114 or fill out this simple contact form to schedule a free case consultation today.