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Pennsylvania Statewide Auto Dealer Investigation Uncovers Fraud

Feb 17, 2017

How does the law protect car buyers and what can buyers do to protect themselves from dealer fraud?

There’s a reason used car salesman have historically had a less than favorable reputation. It’s called dealer fraud.

When buying or leasing a new car, a consumer has such protections as warrantees and the Lemon Law. Combined, these laws offer legal recourse and protection in the event a new car has major problems.

Lemon laws differ from state to state but generally cover people buying and leasing new cars from repeated repairs to the same vehicle system during the first 12 months or 12,000 miles (Pennsylvania) or the first 24 months and 24,000 miles (New Jersey). The problem must impair the use, value or safety of the vehicle. If your car meets the “lemon” criteria, you may be entitled to remedies such as a full refund, replacement, or cash settlement.

But what happens if you’re buying a used car?

Last year, the Pennsylvania Attorney General’s office conducted a statewide investigation of auto dealerships and “took legal action” against nearly 30 businesses and individuals alleging they either sold vehicles without a license, sold non-roadworthy vehicles, and/or engaged in deceptive advertising. In addition, warning letters regarding “advertising and sales concerns” were sent to approximately 130 other auto dealers throughout the state.

Dealer fraud can encompass several different dealer actions or inactions including but not limited to misrepresentations about the car or its prior accidents, backdating or odometer fraud, illegal financing, non-disclosure of negative equity, and more. Dealer fraud also occurs when a car dealer sells you a car with known defects or sells you a previously wrecked car without disclosing it, or engages in illegal financing.

The Pennsylvania Attorney General’s office has some tips prospective used car buyers should follow to help decrease the likelihood of becoming a victim of fraud. Buyers should know what issues the dealer is required to disclose (such as whether there is frame, engine block, transmission, or flood damage among other things) and buyers should have their own mechanic inspect the vehicle before they buy it (or move on to another dealer if they won’t allow an independent mechanic inspection). In addition, prospective buyers should confirm the dealer is actually licensed (check Department of State records) and should use resources like Carfax or AutoCheck to get information about the vehicle’s history.

As we’ve previously reported on this blog, a used car dealer is not required to repair outstanding auto recall issues or even advise a buyer that an outstanding recall exists on a particular vehicle. Before buying, consumers should check for auto recalls here.

If you suspect you’ve been a victim of dealer fraud, you should contact the Law Firm of Timothy Abeel & Associates. Call us at 888-611-5481 for a free evaluation of your case.

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