Car Dealer Fraud

Houston, Texas, Car Dealer Fraud Lawyer

During this economic downturn, even formerly reputable car dealers are frequently engaging in dishonest and illegal sales tactics. One of the most frequently encountered by Houston attorney Dwaine M. Massey is misrepresenting the nature, extent and scope of prior vehicle damage. But in this vehicle sales slump, the “yo-yo” sale is becoming common as well. Both new and used car dealers engage in this practice and its effects can be devastating – both financially and emotionally – to the consumer.

In a typical “yo-yo” sale, a distraught consumer describes a vehicle purchase which is followed, days or weeks later, by an urgent phone call from a sales person who states that the consumer must either return the vehicle, provide additional documentation, get a co-signer for the loan or sign completely, new paperwork because, “…the financing fell through.” This is usually confusing to the purchaser, who, in many cases, has copies of a signed retail installment contract, a signed application for title, and a temporary license plate. All the while, the dealer retains the full value of any down payment or trade in. In some cases, the dealership sells the trade in before contacting the consumer, effectively eliminating the consumer’s ability to refuse the offer to renegotiate the deal. Dealers who are skilled in the practice of yo-yo selling may retrieve the purchaser several times, wearing down the consumer’s sales resistance to these pressure tactics, until the dealer has maximized its profits.

The demand of the sales person is especially perplexing in light of the fact that the dealer had previously led the consumer to believe that all the conditions necessary for financing the vehicle purchase had been met and that the vehicle had – in fact – been sold to the consumer on credit. In cases where the salesperson detects reluctance on the part of the consumer, or where the consumer refuses to bring the vehicle back, the salesperson may threaten arrest or repossession. Frequently, if the purchaser continues to refuse, dealerships will repossess the vehicle, and, in some cases, will report the vehicle stolen.

Yo-yo selling is a consequence of a more widespread illegal practice called, “spot delivery.” A “spot delivery” occurs when a consumer and an auto dealer sign an installment contract for the sale and finance of a vehicle and where the consumer takes delivery, “on the spot,” before the dealer has assigned the contract. The sale becomes a “yo-yo” scam when the dealer changes the terms of the contract based on an undisclosed condition or a condition in a document other than the financing document. The practice is illegal and deceptive.

If you believe that you are a victim of a “yo-yo” sale or other unfair or deceptive trade practice arising out of a vehicle purchase transaction, contact the Massey Law Firm right away before you sign anything else!

Contact the Massey Law Firm Today

To schedule a consultation and discuss your case, contact attorney Dwaine M. Massey today for a free case review. He will assess your case and determine how to best fight these illegal and deceptive practices.