Every year, tens of thousands of Americans find themselves on the wrong side of a scam, and while some have the where withal to pursue criminal charges, many lack the resources or evidence to do so. Fortunately for those people, local and state consumer protection offices field complaints and often get results, despite tight budgets and the bottomless ingenuity of grifters.
The Consumer Federation of America annually surveys these agencies to take the temperature of America's con artists, and every year car-related schemes rank among the most frequent and damaging, from towing scams to dealers who find ways to hide a 100-percent markup. Here are the worst of the individual automotive horror stories from the CFA's report released this week, along with its tips for how to not be a victim yourself.
A perennial favorite that's been made easier with the advent of digital odometers, unscrupulous used-car dealers still get caught doing this. Georgia Governor’s Office of Consumer Protection followed a tip for an Atlanta used-car lot that found it was not only rolling back miles but faking the federally required paperwork. After its probe, 17 shoppers were able to either undo their deals or get reimburse for the reduced value of their vehicles, for a total recovery of $155,888. And that's just one dealership.
CFA Tip: Most states participate in the National Motor Vehicle Administration, through which you can get information about the title, whether the mileage that shows on the odometer is accurate, and whether the car was previously declared a total wreck. Go to www.vehiclehistory.gov
Lease damage boomerang
If you turned in a leased car with 1,000 miles less than what the contract called for, and in perfect, well-documented condition, you'd think there'd be no problem. That wasn't the case for one New Jersey woman who did just that — only to get a bill six weeks later for $1,600 citing "damage" to the car. Fortunately for her, a county's consumer protection office was able to force the leasing company to drop the bill — mainly because New Jersey law requires lease agents to let consumers get an independent appraisal of any such damage bills.
CFA Tip: "When you return a car at the end of a lease, keep a copy of the lease agreement, note the mileage on it, and take photos so you’ll have proof if there are any questions later about the terms of the lease or the condition of the vehicle."
The secret 100-percent markup
A elderly New Jersey man was lured to a dealership by an ad offering a model he was interested in for $14,999, along with a $4,000 credit on any trade-in. Inside the dealership, the sales gang told him there was no more $14,999 model, but there one was just like it — except it was missing its window sticker with the detailed price data. The man, believing it was the same price, put his $4,000 credit and $2,000 downpayment against a loan he thought would be about $9,000.
Instead, the total price of the deal came out to $46,000.
Now, the CFA report doesn't explain how the man managed to sign on such a contract without noticing the discrepancy. But under pressure from the county consumer agency, the dealership admitted that it had stashed the window sticker with a total price of $20,000 in the trunk. The deal was unwound, and the shopper got the car for $14,999.
CFA Tip: "Federal law requires the Monroney sticker to be posted on a side window or the windshield of all new cars for sale. If you don’t see it, walk away. And if you suspect that a dealer is using false advertising to lure you in and switch you to a more expensive deal, don’t take the bait – report it."
Complaints about towing have been growing rapidly across the country according to the CFA, and a case from the Maryland suburbs of Washington, D.C. illustrates one culprit: Stores and shopping malls that put up parking meters on private spots, then write tickets and tow cars in violation. In most cities, only the city government has the right to meter individual parking spaces — but since the private meters have no clear labeling, shoppers can't tell the difference. One agency says its managed to get dozens of refunds for shoppers whose vehicles were towed from such spots.
Title loan shenanigans
It's risky enough to do business with a title-loan company when they're operating legally, since they can charge wickedly high rates for a short-term loan and patrons may be gambling their sole source of transportation. The biggest scam busted by the Virginia attorney general's office in 2012 involved an unlicensed title-loan firm named CashPoint that had charged up to 250 percent annual interest on its loans to 913 consumers, far higher than state law allowed. Under a settlement, CashPoint refunded nearly $600,000 to more than 850 borrowers and agreed to several strict limits on its business with them — including not repossessing the vehicles of those who took out such loans.
CFA Tip: "Title loans, like payday loans and other short-term loans, are very expensive, and you could lose your car if you don’t make your payments. Set aside as much money as you can on a regular basis to cover your everyday needs and be prepared if you have unexpected expenses."
Top photo: ryantxr via Flickr