Laws like the Lemon Law are essential to protect car buyers, as the car purchasing process is filled with serious problems that could cause substantial financial losses for consumers. It seems like every day, there are new reports of vehicle defects, car recalls, and problem car dealers. Just recently, for example, WSAU reported on large-scale fraud perpetrated by two car dealers which potentially cost consumers hundreds of thousands of dollars.
Fraud is a major problem within the automotive sales industry and consumers are the ones who suffer whenever things go wrong. If you are buying a vehicle and you want to protect your rights, you should research consumer protection laws in advance and do your due diligence on the car and dealer as much as you can. Even under these circumstances, unfortunately, things can go wrong. If and when they do, you should contact an experienced Orange County lemon law attorney for help.
Car Dealer Fraud Costs Consumers Thousands
According to WSAU, dozens of consumers may have been victimized in a recent fraud scheme allegedly perpetrated by two dealers. The fraud scheme dates back years and an investigation into exactly what happened and who was responsible is still ongoing.
Back in 2010, an investment group organized as an LLC was granted a dealer license and opened a car dealer. In 2014, the Department of Transportation began investigating complaints that the investment group had committed license violations. After the investigation, the DOT issued a conditional license but imposed stipulations.
What appeared to be happening was the dealer was selling cars, but didn't actually have the titles for the vehicles that were being sold and had not yet paid for the cars that were purchased at an auto auction. The owner of the auto auction said he had never seen any behavior like this in 30 years in the car industry.
In 2015, the investment group “bought” $300,000 worth of cars and sold them -- again without titles and without paying for the cars. This time, the person who was owed the money was offered a free buy-in to a car franchise. He accepted, in an effort to recoup his money, and reportedly became a 90 percent owner of the franchise. Disagreements arose, though, including serious questions about whether money was improperly being taken out of business accounts.
Amidst all this turmoil, the business was being run poorly and promissory notes were being signed with all different names. The DMV eventually began to investigate and filed a petition to have the dealer's license revoked. Investigators are now trying to unravel fraud which dates back more than half a decade.
This is just one of a great many examples of car dealer fraud that occurs far too frequently. Like in this case, many fraud schemes are difficult to detect in a timely manner and are complicated to investigate when law enforcement does become involved.
With so much fraud and so many problems in the car sales industry, consumers should do everything they can to protect themselves when purchasing a vehicle. This includes learning about California’s lemon law. If a problem does arise, getting legal help from an experienced attorney can be the best option.