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Tesla Alleged Dealer Fraud Whistle-Blower Lawsuit

Mar 14, 2018

Is a New Jersey Tesla dealer engaging in fraudulent business practices?

A former Tesla employee has commenced a lawsuit against Tesla after allegedly experiencing a series of demotions and eventual termination after allegedly blowing the whistle on what he claimed were “alleged business practices he saw as fraudulent”.Dealer fraud in the automotive industry may occur at various phases of the vehicle purchasing or leasing process and can take many different forms including:

  • inflating the invoice price
  • bait and switch advertising
  • “add-on” concealment
  • yo-yo financing
  • prior accidents/flood damage
  • odometer fraud
  • car misrepresentations (such as selling a vehicle as “new” when it was previously returned as a “lemon” due to a defect mechanical problem shortly after the original purchase).

New dealer return fraud is the name given to the practice of auto dealers fraudulently or negligently misrepresenting that a vehicle is new when it has actually been returned to the dealership because of a defect or persistent mechanical problem. Dealers found guilty of this type of fraud could face significant damage awards.

The lemon law applies to vehicles which are new or relatively new yet suffer problems which substantially impair the use, value or safety of the vehicle. In addition, a “lemon” can be subject to an unreasonable number of repairs for the same persistent problem. In Pennsylvania, the lemon law applies during the first year or 12,000 miles and in New Jersey, it applies within the first two years or 24,000 miles.

In his lawsuit, the former Tesla employee from New Jersey specifically alleged Tesla “was concealing pre-delivery damage repairs to consumers before selling the vehicles” and was “receiving vehicles designated as ‘lemons’ and then reselling the vehicles without informing consumers the cars were used were ‘demo/loaner’ vehicles”. He reportedly believed that the Conscientious Employee Protection Act (“CEPA”) would protect him against employer retaliation for bringing these allegations to light.

If you suspect you’ve been the victim of dealer fraud, or that you may be driving a lemon, the Law Offices of Timothy Abeel & Associates can help you. Depending on your particular problem, you may be able to get a full refund, a brand-new car, or a cash settlement. Contact us today for a free consultation.

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