Car dealers engage in all kinds of deceptive practices. From misleading advertisements to odometer tampering, a dishonest dealer has lots of tricks up his sleeve to sell you a car for more than what it’s worth or get you to agree to additional products or services you don’t need. These products and services are called purchase add-ons and include things like extended warranties, payment programs, guaranteed automotive protection (GAP insurance), credit life insurance, road service, undercoating, and theft protection. While these products may be legitimate, if you are unaware that they have been added to your purchase, you may have been a victim of auto fraud.
Recent Examples of Dishonest Add-On Practices
A recent crackdown on deceptive practices by automotive dealerships by the Federal Trade Commission (FTC) resulted in the discovery of a major financing company and a dealership engaging in unscrupulous add-on practices. Understanding what happened in two major cases can help consumers be more aware of how this could happen to them.
National Payment Network (NPN, Inc.). The FTC found that this company, based in northern California, sold an auto loan payment program to consumers, promising they would save money over the life of their loans when, in fact, they charged such high fees for the service that possible savings were cancelled out. Fees to enroll in the service averaged $775 for a standard five-year auto loan. NPN has been ordered to refund more than $1.5 million to consumers and waive another $949,000 in fees to current customers.
Matt Blatt Dealerships. This chain of New Jersey dealerships was found to have participated in NPN’s deception by selling their services to their customers and failing to explain the additional costs. The dealerships received a commission of $1000 for each customer it enrolled in the program. Matt Blatt Dealerships was ordered to pay $185,000 to the FTC for its involvement in the scam.
Avoid Unwanted Add-Ons
Hopefully, the dealership you are doing business with is honest and straightforward about the additional products and services they offer. There is nothing wrong with a salesperson offering you an extended warranty or roadside assistance, but he or she must be honest about the cost and what the cost covers. Before entering a dealership, learn about products like warranties, theft protection, and undercoating and decide whether you want them or not. Do not allow yourself to be talked into something you know you don’t need. If you find you have been coerced or tricked into purchasing an add-on, contact the experienced auto fraud attorneys at The Consumer Law Group. We’ve seen it all and we can help you understand if you have been the victim of fraud.