This lawsuit is about an often fraudulent practice in the automobile sales industry called a "yo-yo sale" or a "spot delivery". Under this scheme, the auto dealer sells a car to the consumer "on the spot" without regard to whether any third party will agree to assignment of the car note. Typically, the consumer will sign all necessary paperwork at the behest of the dealer and will receive temporary or transferred tags, a set of keys, and possession of the automobile. The consumer leaves the dealership believing he or she owns the vehicle.
In this case, the dealer is unwilling to accept the terms that the various finance companies are willing to pay for an assignment of the car note; in other words, the dealer wants to make more money selling the loan. This is where the term "yo-yo sale" comes from. Because the car dealer cannot make enough money selling the paper, the dealer attempts to "undo" or cancel the sale, and yank it back from the buyer, telling the buyer that he or she must come in and sign a new loan on less favorable terms or merely illegally repossessing the vehicle, as in the instant case. The dealer also does not send the consumer any written notice of adverse action.
In June 2007, the matter was resolved by a cash payment with the agreement of all parties. The terms of the settlement are confidential