Submission Number: 00056
Received: 12/29/2011 11:00:23 AM
Commenter: Gregory Reichenbach
Agency: Federal Trade Commission
Initiative: Public Roundtables: Protecting Consumers in the Sale and Leasing of Motor Vehicles; Project No. P104811
Attachments: No Attachments
I have been a consumer protection attorney practicing in Ohio for over seven years. One of the areas in which I assist consumers is with used automobile cases involving unfair and deceptive acts. On a regular basis, I receive calls from consumers complaining about various acts committed by used car dealers. One of the top complaints I hear involves spot delivery issues. Often, the problem is that the consumer is told explicitly that financing has been approved, and then after the consumer has given a down payment and/or a trade vehicle and taken the purchased vehicle home, the dealer contacts the consumer, tells him/her that the financing "did not go through" and that the consumer must bring the car back and sign new papers. Some of the time, there is a spot delivery agreement signed by the consumer. When this is the case, usually the consumer either was not given time to read the document (often exhausted after spending an inordinate amount of time at the dealership waiting on the dealer for no apparent reason), or the dealer orally "explained" the document in an inaccurate manner, usually coupled with a reassurance that the consumer's financing has been approved, directly contradicting the spot delivery agreement.
Other times, there is no spot delivery agreement in place. In those instances, there is either a binding installment contract between the dealer and the consumer, which the dealer is failing to honor, or there was a purported contract between a finance company and the consumer, signed by the dealer on behalf of the finance company without the finance company's authority.
Most consumers bring the car back at the dealer's request, regardless of whether there is a spot delivery agreement in place or not. On numerous occasions, I have heard consumers complain that, in response to the consumer's questioning or complaining about the prior representation that financing was “approved,” the dealer threatens to phone police, and report the car stolen, to have the consumer arrested, or both. In one example, a car dealer made those threats, then actually phoned police and attempted to have the car reported as stolen, even though there was no spot delivery agreement and there was a valid installment contract signed by the dealer and consumer. I personally heard this dealer's owner/president say that if those facts happened again, he would take the same actions. Luckily, in that case, law enforcement authorities correctly recognized that the matter was civil, and did not take any criminal actions.
Based on my years of experience and talking to hundreds of consumers, I know that these spot delivery problems are very common. These acts may not be committed by every car dealer, but this is a widespread problem. I believe it is safe to assume that for every consumer who phones an attorney, there are numerous others who do not. I hope that the FTC will address this problem.