Category Archives: Vehicle Buying and Selling Scams

Spot Delivery Puts the Dealer In the Driver’s Seat

Be warned: Just because you put down cash and roll away from the dealership with a new vehicle doesn’t mean you’ll get to keep driving it. In fact, as the complaints to vividly illustrate, leaving a dealership with the car – and keeping it – can sometimes be far more complex than you’ve bargained for.

Increasingly, buyers are signing purchase papers and driving happily away in their new cars, only to find out that the financing they agreed on didn’t fall into place. At that point, they’re usually told that they must either return the car or sign up for sub-par financing at extremely high rates, sometimes approaching 20 percent per year.

Often, the people squeezed by these spot delivery schemes are the most vulnerable, those with tarnished credit or low income who don’t have a lot of alternatives. At other times, they’re victims of dealer fraud or other bad faith dealings. Regardless, it’s an ugly situation for the consumer.

Consider the experience of Michelle of San Jose, who put down $3K on a used Ford Explorer, signed a finance contract and took the car. The next day, she was told that the financing fell through, and that she had to get a co-signer or return the vehicle.

Michelle wasn’t having it. "I told them that if my application didn’t qualify with only my information, then I wasn’t interested in keeping the car," she says. Despite her resolve, Michelle didn’t get her money back, though she did get to keep the car.

Michelle was one of the luckier spot delivery customers. More typical is Brandon of Tarpon Springs, FL. He was aghast when his mother-in-law was pressured to get newer, much higher-rate financing and threatened with repossession when she balked.

According to Brandon, it all began when his mother-in-law decided to buy a Ford truck. She put down $3K and traded in a Dodge truck, then took her new truck home from the dealership, which, she believed, had approved her for financing. Instead, within a couple of days she was contacted by a lender, who asked for W-2s, tax returns and other financial documentation.

When that lender refused to finance her, she gave the dealership $12,000 more in cash, leaving a $13,000 balance, so far still unfinanced. The dealer continues to threaten, and the family still doesn’t know if the mother-in-law will get her trade or cash back.

"The dealer has told her that the repossession department is already looking for her truck, and that she must sign new papers immediately," Brandon says.

A Rare Problem?
Dealer industry reps say that spot delivery problems are rare, and that the issues that do come up usually could have been avoided if consumers took the message of the conditional sales rider to heart.

"Unfortunately, some consumers pay more attention to the check they get for dinner than they do to the second-highest priced deal they’re going to do in their lives," notes Alex Kurkin, a partner with the Miami law firm of Pathman Lewis LLP.

While there are few statistics available, Kurkin argues that spot delivery returns and refinancing conflicts couldn’t be happening very often. After all, he says, a dealership doesn’t benefit from letting consumers drive cars when the dealer hasn’t been paid.

"A dealer can’t afford to have that car out there for a month and a half and not get paid," says Kurkin, who represents the Florida Automotive Dealers Association. "They won’t have enough to buy new inventory. The banks that finance them might even call in the inventory loan."

But Kurkin may be understating the problem. In fact, given the unclear legal status of conditional sales riders, it’s not surprising that the issue will crop up from time to time. According to consumer attorneys and consultants familiar with spot delivery issues, state law is still unclear as to whether conditional sale riders will stick, leaving buyers in limbo.

In fact, observers say the law hasn’t caught up to the intricacies of spot deliveries. For example, state law in New Hampshire is unclear on something as simple as whether you should put temporary tags on a vehicle that’s been spot delivered but not financed, notes attorney Peter Wright, professor at Franklin Pierce Law Center in Concord, NH.

Even in transactions that flow smoothly, the papers get back-dated to the date of sale, rather than to the date the financing finally comes through. During those prior weeks, should the car have had temporary tags on it or not? According to Wright, no one’s really sure.

Consumer Misery
How can car dealers get away with this? The answer, Wright says, is that many consumers end up signing their rights away. Spot buyers are typically asked to sign a contract addendum, known as a conditional sale rider, stating that the car sale doesn’t close until the dealer gets financing approval from the bank.

Too often, many consumers don’t understand what they’re signing – or what it means for them if financing falls through.

Though the dealer may describe financing as a done deal, the finance contract is actually based on an educated guess as to what the banks the dealer works with will accept. In reality, banks usually take a few days or weeks to make their lending decision.

If the preferred bank bounces the contract, the dealer will attempt to place the loan with a different bank — usually a "subprime" lender who charges extremely high interest — and if the consumer balks, the dealership may attempt to yank back the car.

As if that wasn’t painful enough, some consumers find that the rider they’ve signed forces them to accept whatever loan arrangements the dealer makes. Not surprisingly, the financing the consumer gets in that situation is seldom attractive.

Boosted by the dealer’s finance commission, which usually piles a few points of interest on top of the bank’s charges, a buyer’s monthly payments can climb dramatically.

"We’ve seen evidence that when somebody is called back to sign new financing papers, the new rate is higher than what that financing company would have done [if the dealer wasn’t involved,]" says Wright, who runs the consumer law clinic at Franklin Pierce. "Basically, people have to sign any deal that the dealer digs up."

That was certainly the case when Melissa of Wheaton, MD attempted to buy a Nissan Altima.

When Melissa first signed her contract, she agreed to pay $388 a month for the Altima. Accepting that, she took the car home. Three weeks later, the dealer called back — and told her that she’d have to pay $477 a month if she couldn’t get a co-signer. "I feel that I have been misled and I should not have to do [either one]," she says. "I would like to keep the car and pay what was the original agreement."

Fighting Back
Are these contract riders legal? At the moment, the courts are still sorting that out. While many dealers manage to push through these provisions and make them stick — sometimes with the backing of state retail sales laws — federal courts have raised some questions as to whether these conditional sales riders are fair or enforceable.

In at least one recent case, a federal court found that the deal is complete when a dealer signs the sales contract, rather than when the banks come through with a loan. "The court realized that the dealer has recourse," notes Duane Overholt, president of consumer advocacy firm Stop Auto Fraud. "For example, they have the ability to consummate the deal as agreed by simply signing the deal with the bank and accepting responsibility for the loan."

Bolstered by rulings like these, consumers like Julie and Carl are fighting back. When the Bullhead City, AZ couple bought their used car, they put $300 down and agreed to a 31-month repayment term. About two weeks after they drove the car off the lot, the dealer asked them to bring back the car or sign up for payments nearly double what they’d expected.

They didn’t do either. Instead, they two contacted Overholt, who put them in touch with a lawyer.

Since then, the dealership’s offer has gone from cutting the loan term in half and requiring an additional $1,000 down, to asking for $300 more down and cutting only one year off the financing period. Under the new terms, payments would actually drop slightly.

Still, Julie isn’t satisfied. She plans to fight until the dealer abides by the deal she and Carl agreed to in the first place. "The dealer did this on a Monday afternoon, and they had time to communicate with the bank before we took the car," she says. "The way I see it, it’s their problem now."

Written by Anne Zieger

Theft Rings Scam Dealers Out of Vehicles

It was an auto dealer’s dream: an auto brokerage that referred dozens of buyers with six-figure incomes and top credit scores to Atlanta dealerships.

The brokerage "seemed like a good customer," says a dealer who did business with the company, Xquisite Empire Inc.
The transactions "involved real numbers on real people with real credit," says the dealer, who asked not to be identified.

Just one catch: Xquisite Empire was a theft ring, prosecutors say.

Here’s how they describe the alleged scheme:

Beware of the Spot Delivery!

The "spot delivery" is a technique that car dealers use to get you to take delivery of a vehicle immediately after you agree on a car deal.

Car dealers know that if you make a deal, then wait a day or two before picking up your vehicle – which is fairly common – there’s a good chance you are going to have second thoughts and may possibly cancel the deal and start looking elsewhere.

If you make a car deal and wait a few days before picking it up you may mention the deal to someone who proceeds to tell you that you are getting ripped-off! You might also start thinking about all those car payments and decide you want to hold off.

There are countless scenarios that may cause you to change your mind or get a case of "Buyer’s Remorse" as car people like to call it. This is the car sales persons worst nightmare!

Car sales people know they have to get you when you’re "HOT," or when you’re all worked up emotionally. They don’t want to give you time to think it over. They are going to do everything they can to get you down the road in your new vehicle "Right Now!"

Everything is Now, Now, Now! In the Car Business There’s No Tomorrow!

From my own experience, I have noted that no matter how apprehensive the customer gets when you rush them into their new car, they clearly sigh in relief once the paperwork is signed and they are about to leave in their new vehicle. In their own mind the deal is done, so there is no reason to give it any more thought!

SO BEWARE. . . the Psychology Works!

Often, if you are allowing the car dealer to handle the financing (Bad Idea), the Finance Manager will throw together some bank papers for you to sign, and then, usually, after you’re down the road, he’ll get the deal approved at the bank, and hope they go along with the rate and terms that he signed you up for!

Now this is where it can get real sticky; If for some reason they can’t get the deal put together with the bank whose paperwork you signed, they have to go to another bank then get you back in to sign new paperwork!

If this happens Watch Out! I guarantee you the payment is going up, or the term is going to be longer. In other words it’s going to cost you more money! If they can’t get the loan bought anywhere then they have to get the car back from you! Not a pleasant situation for them or you!

It’s a crazy, high pressure system and you don’t want to get caught up in it. This is why it is so important for you to be fully prepared before you ever step foot on the car lot!

The bottom line is this: Take your time, think it through and don’t let the sales person rush you into anything. You want to be sure you are making the best decision for you . . . not for the car dealer’s bank account!

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Car Dealerships Prime Target for Identity Thieves

The thieves who struck Serramonte Infiniti in suburban San Francisco in April ignored the dealership’s cash and costly equipment. But they hit the jackpot anyway.

They reached into an unlocked cabinet and stole 57 files of customer transactions. The files included credit reports, bank statements, driver’s license numbers, credit card information and Social Security numbers.

Two suspects in the theft are charged with burglary and credit card fraud. They allegedly used the stolen data to make illegal purchases at department stores.

Fifteen customers of the dealership told police that the suspects tried to steal their identities. The crime embarrassed Sonic Automotive, the nation’s third-largest auto retail group, which owns the store in Colma.

Each year, nearly 10 million Americans are victims of identity theft, a crime that costs them about $5 billion a year, the Federal Trade Commission estimates.

The FTC does not offer specific figures for dealerships, but dealerships and their customers are increasingly vulnerable to thieves and computer hackers, security experts say.

Security breaches can subject dealerships to consumer lawsuits, federal and state penalties and lost sales. Dealerships are attractive targets because of the personal information they collect about customers.

Financial institutions that compile similar data have made conspicuous efforts to fight identity theft. Citibank has built an advertising campaign around the issue.

But many dealerships are lagging in their efforts to safeguard their customers’ sensitive financial records, experts warn.

"When you buy a vehicle, you have to give about everything but your blood type," says Charles Dodd, CEO of the Center for Information Systems Security Research of Tampa, Fla. His computer security firm works with dealerships and other businesses.

"A car dealer might have 10,000 customers," Dodd says. "For a thief, that’s a candy store."

Bruce Townsend, deputy director of the U.S. Secret Service, says, "There is no question" identity thieves are targeting dealerships. The Secret Service investigates ID theft cases.

"The information (dealerships) have has value," he says. "It is just as valuable as currency."

Townsend headed the West Tennessee office of the Secret Service from 1997 to 2000. At least a third of the ID theft cases that crossed his desk involved dealerships, he says.

The federal Safeguards Rule requires dealerships and other businesses to protect customer information. Some states require additional measures. The FTC can fine dealerships $11,000 for each failure to comply with the rule, which took effect in May 2003.

"We think identity theft is a big problem," says Rodney Nettles, business manager of Bob Taylor Chevrolet and Bob Taylor Jeep in Naples, Fla. He says the dealerships have revamped the way they handle customer data.

They have spent $15,000 on computer technology designed to repel fraud. Professionals monitor their networks. The stores scan rather than photocopy driver’s licenses. They no longer keep transaction files on paper.

"This is a bear to keep up with," Nettles says.

Many other dealerships are reluctant to acknowledge the problem of identity theft.

Beth Givens, director of the nonprofit Privacy Rights Clearinghouse, a consumer advocacy group in San Diego, says customers could shun businesses that are shown to play fast and loose with sensitive information.

The Safeguards Rule does not authorize private civil suits. But legal analysts believe customers could sue dealerships for negligence if they compromise financial data.

"One could easily argue that the rule establishes a duty to the customer," says Jim Ganther, a lawyer for Continental-National Service of Tampa, which supplies finance and insurance products to dealerships.

"Breach of that duty resulting in damages all adds up to negligence," Ganther says. "That’s all a lawyer needs to open the courthouse doors."

Consumers have sued other businesses they allege were negligent in handling personal information, Givens says.

Jessica Rich, assistant director of the FTC’s division of financial practices, says the agency is investigating dealerships, but declines to say how many. The commission soon could cite stores for violating the Safeguards Rule, she says.

The National Automobile Dealers Association advises dealers on complying with federal privacy rules. NADA recently sponsored a two-hour conference call with FTC privacy experts.

"Identity theft, through whatever means, continues to be a significant concern for dealers," NADA lawyer Paul Metrey says.

Sonic says Serramonte Infiniti contacted police and notified customers whose information was compromised after the April burglary.

Serramonte Infiniti now keeps those customer files in a locked, windowless room, says Bill Steers, a Sonic spokesman. Only a few employees have access to that room. The dealership also changed locks on its building, file cabinets and employee desks. It installed a security camera system.

All Sonic dealerships comply with the Safeguards Rule, Steers says. "Sonic recognizes the critical importance of protecting our customers’ personal information," he says. "Our dealerships have implemented rigorous procedures and controls to safeguard customer information."

Asbury Automotive of New York, the nation’s fifth-largest auto retailer, also endured a recent alleged incident of identity theft at one of its dealerships in Orlando, Fla.

A former salesman was among 15 suspects charged in June with participating in an identity theft ring. The ex-employee allegedly tapped dealership records, providing financial data that enabled other members of the ring to make illegal purchases with false documents.

Customer records remained intact, says Allen Levenson, Asbury’s vice president of marketing. But thieves used stolen identities to buy seven used vehicles from a dealership through the indicted salesman, Levenson says. Police recovered the vehicles.

Levenson says Asbury couldn’t have anticipated the thefts. The salesman had no police record. He passed background checks and a drug test before he was hired. "You can only go so far," Levenson says.

Even if a thief is not on a dealership’s payroll, employees remain the chief source of vulnerability to identity theft, experts say.

"Employees are the biggest risk," says Brian Bentz, a partner with the Dixon Hughes accounting firm in Memphis, Tenn. The firm has 2,000 dealership clients.

Bentz says he urges clients to restrict access to sensitive information to guard against dishonest or careless employees. He cites a case in which a dealership employee left customer files on a desk while he got coffee. Someone walked in off the street and walked off with the information.

Employees have left copies of customers’ credit reports on top of a photocopier, Bentz says. Or they have tossed sensitive data in the trash without shredding the papers, an oversight that led to identity theft.

"Dealers have a better awareness and understanding of how rampant identity theft is" because of the Safeguards Rule, Bentz says. "But is everyone where they need to be? No. To change policies and procedures overnight is not easy."

The FTC’s Rich concedes that "there is no such thing as perfect security." But she says dealerships need to install reasonable policies and procedures.

Computer hacking can pose a greater potential threat for identify theft at dealerships than a physical break-in. Hackers can penetrate files from a remote location. A dealership may not even know its data are compromised.

"I witnessed a horror story with my own eyes," Ganther says. He visited a Florida dealership to assess its computer network’s compliance with the Safeguards Rule.

"While I was there, I saw the (security) consultant’s laptop indicate a hack attack was under way," Ganther says. "A signal was coming in through the dealer’s high-speed T1 line, and sweeping across every computer on the network every six seconds."

Dealership managers watched the attack but could not stop it, he says.

Ganther refuses to disclose the dealership’s name and location. He says the store’s general manager thought such an attack was impossible because it had spent $13,000 on a computer firewall.

Alan Andreu, president of Dealership Defense, a software security firm in Plant City, Fla., says firewalls can give dealers a false sense of security. They still must monitor their systems for potential hackers, he adds. Andreu sells software that assesses network security and alerts dealerships to intruders.

"If the firewall is improperly configured, it is next to useless," Andreu says. "It is nothing more than a box with lights on it."

Written by Donna Harris


Ohio has a long and technical definition for "fraud" but, really, fraud is just a lie that costs you money.

Generally, there are three kinds of fraud:

Outright Fraud. This is where you ask a question and they give you an answer and, when they do, they know they are lying to you. This is generally known as a "bold faced lie."

The half-truth fraud. This is where you ask a question and they give you an answer and, when they do, they really do not know if their answer is true or not—they just don’t care. In other words, a "sin of omission."

Fraud by concealment. This is where you may not ask the right question and they certainly don’t give you the answer because they know that if they did then you wouldn’t buy what they are selling. This is another way of hiding the truth.

Any one of these can be an act of fraud and can cost you hundreds or thousands of dollars.

When the fraud involves a car dealer, we usually call it "auto fraud" and car dealers have a hundred ways to do it! Browse through our car dealer glossary of terms for a real eye opener.

Other businesses commit fraud on consumers, too. Web site scams, repair shops, time share rip-offs, telephone solicitors, door-to-door salespeople—just about anybody can rip you off if you’re not careful.

Auto Theft Scam Uses Consumer Protection to Get Keys

Car thieves are taking advantage of a service that was meant to protect car buyers. Police say thieves in Ontario are legally getting reports on used vehicles to acquire keys for cars they’ve pre-selected.

Police say thieves have had to adapt as car companies install more sophisticated anti-theft devices in their new cars. Many cars now won’t start without new keys that come with a special chip called an immobilizer.

Thieves are going after older cars or driving off with your car after getting at the keys.

It happened to Howard Lerner of Toronto. It took him months to figure out how his Audi was driven out of his regular parking spot in an underground garage.

All the thieves needed was his license plate number. They then headed to a self-serve kiosk set up by the Ontario government. For a fee, they were able to pick up a used vehicle registration package, even though Lerner’s car wasn’t for sale.

The package is designed to protect buyers of used cars. It’s meant to allow people to check on the history of a car, to avoid liens or even to know if the car they’re thinking of buying has ever been reported stolen.

Armed with Lerner’s data, the thief got an original copy of his car ownership, then got a real driver’s license, with the thief’s picture and Lerner’s name on it. With that, the thief walked into an Audi dealership. He said he had lost his key and needed a new one. The dealership provided the key and the thief drove off with the car.

York Region police detective Bill Goetz says the thieves ran the scam like a business, the most sophisticated he’s seen.

"We found 123 different sets of keys," Goetz said. "Our approximate value on it was between four and six million dollars."

One of the cars stolen was Lerner’s. The police eventually arrested two men and laid 55 fraud-related charges. One of the men served 18 months in jail. The other was deported.

When CBC News told the Ontario Ministry of Transport how the information has been used to steal dozens of cars, they said they’d check into it.

In Toronto, four out of ten car thefts last year were cases where the thieves simply took the keys – either through fake ID or by breaking into houses and grabbing them.

Written by Howard Learner

Auto Theft: From A Penny-Ante Game To A Big-Stakes Business

Here today. Gone today. To a car thief, time is money, and we mean big money. The old saying is that crime doesn’t pay, but that doesn’t seem the case when it comes to car theft. It’s a big business. So big, in fact, that if it were legalized and incorporated, it would rank 56th among Fortune 500 companies.

That statistic, though staggering, just takes into account the direct value of the vehicles stolen. Actually, car theft costs us as a society much more. Consider all the indirect costs associated with this crime epidemic.

Because car theft is so prevalent, it increases the cost of law enforcement. The price of tracking down, prosecuting and jailing auto thieves takes a sizable bite out of local and state government budgets each year. Auto thefts also are a key factor in bumping up insurance premiums, and the cost is compounded when theft is accompanied by insurance fraud, as it very often is these days. If we could eliminate or severely curtail these two crimes, it would go a long way toward keeping everybody’s car insurance costs down.

Of course, there are the costs of other related crimes. Car thefts almost always result in the theft of personal property left in the vehicles. Not only does this engender a cost in and of itself, it also creates opportunities for other crimes. Many auto thieves emerge with items like checkbooks, bank deposit slips, credit cards and credit card receipts that can enable criminals to commit credit card and bank fraud.

The human price paid to car thieves is also large. Each year scores of car thefts result in murder and kidnapping. The evening news is filled with tales of car thieves driving off with their victims’ small children still strapped into baby seats.

Recent efforts of law enforcement working in tandem with insurance companies in states like Pennsylvania, which created a governmental authority to deal with the problem, have put a dent in car theft, but the problem is still a gigantic one that has the potential to strike anyone of us who drive at any moment.

Car thieves have a variety of motivations. The most common ploy of the professional criminal is to steal vehicles in order to obtain the parts. Selling the parts of a car individually may bring a criminal two or three times what he could get selling the vehicle intact. Most often thieves collude with other criminals to set up "chop shops" that can strip a car down to its component parts in a matter of minutes. These parts go into the legendary, clandestine "Midnight Auto Parts" network that services shady repair shops and individual mechanics who are eager to purchase the stolen parts at a discount.

Another common motivation to steal a car is simply to sell it again, in the same way that any stolen property is "fenced" illegally. Often thieves will hustle the vehicle across state lines, where its identification numbers are altered to match forged or fraudulently obtained titles and registration papers. Another common ploy is to ship the stolen vehicles overseas. Often a vehicle stolen in a port city will be in a shipping container ready to be sent overseas within hours of its theft.

A frightening new trend in car theft often is referred to as "cars for crack." The typical scenario goes like this: a drug buyer will lend his vehicle to a crack dealer in exchange for drugs. The drug dealer, in turn, uses the vehicle to transport drugs or commit other crimes with no threat of having to forfeit his own car if he’s caught. If the drug dealer does not return the car or the car is seized by law enforcement, the drug buyer who lent the car reports the car as stolen to his insurance company. The insurance company then settles the claim, putting more potential drug money in the hands of the buyer. If the car is returned, the process simply repeats itself.

Another type of car theft was spawned by the increasing prevalence of automobile leasing. In this scenario, usually referred to as a "give up," the owner or lessee actually is quite willing to have the vehicle stolen. Why? Because it typically involves either leased vehicles with excess mileage whose turn-in costs are high or purchased vehicles whose owners no longer desire to make the monthly payments.

In these instances, the owner actually arranges to have the vehicle stolen or simply abandons it in a known high-crime area. In some cases, the owner/lessee simply may hide the vehicle and report it stolen to the police and insurance company. Sometimes, to ensure that the car is a write-off, the owner actually may burn the vehicle to make certain it is a total loss. These cases begin as car theft, but also involve another felony — insurance fraud.

Back in the 1950s and 1960s, many juveniles would steal cars just to have wheels. These joyriders often abandoned the cars soon after the theft, without doing much damage to the vehicle. With the growth of juvenile gangs in many areas in the last couple of decades, joyriding has taken a sinister turn. Today many cars stolen by teens are "fenced" or "chopped" by others associated with the gang. They also may become part of the "cars for crack" scenario or be used in the commission of other crimes.

A final motivation for car theft is truly a product of our Information Age. Your car can be "stolen," while you continue to drive it. Here’s how it works:

Just like you have an established identity, so does your car. You establish and verify your ID by your Social Security number and your Driver’s License number. A car establishes and verifies its ID by its unique Vehicle Identification Number (VIN). If a thief gets hold of your vehicle registration and insurance card, items typically stowed in the glove compartment, a criminal can use that information to obtain a license plate. The thief can then steal a similar vehicle, alter its VIN to match your vehicle’s VIN, and feel confident in his ability to sell the vehicle without detection. The result is a big payday for the criminal and a huge headache for you, especially if the cloned vehicle is used in a crime or involved in an accident.

Despite the installation of alarm, theft-prevention and theft-recovery systems, no vehicle is immune to theft. But there are many steps you can take to encourage a thief to "steal elsewhere" rather than trying to pinpoint your car.

Written by Erasmus Ipswitch

Beware of Spot Delivery! Don’t Be Put on the Spot

So you purchased a beautiful new car, signed all the necessary paperwork and drove it right off the lot with a big smile on your face. The dealer got you approved on the "spot". Or so you thought.

A few days or weeks later, the dealer calls and asks you to return to "sign a few more papers". "Mr. Smith", they say, "we couldn’t get the car financed and you need to sign a new loan with another bank" or "you need someone to co-sign", or "give us another $1000 and we can do the deal", or "Mr Smith, we need to increase your monthly payment to get this done". The dealer may even have delayed paying off a traded vehicle loan or refused to mail registration papers, all to place additional pressure on the consumer to do as they are instructed or to face dire consequences to their credit.

Sound familiar? It gets worse.

If you refuse, the dealer may threaten to repossess the car, tell you that you have no legal entitlement to keep it or even make you wait for hours at the dealership under some excuse, to wear you down. This situation is most common involving consumers with bad credit, since dealers perceive that such people are vulnerable and easy to take advantage of.

Most consumers assume the dealer is telling the truth and will do whatever the dealer says, resulting in higher payments, additional money being spent over the life of the loan and/or thousands of dollars in increased "hidden" costs. Those who refuse, see their cars repossessed.

What is happening here? It’s a Scam. Dealer Fraud. Unlawful. Illegal. Call it what you will. The industry has given it a name: Spot Delivery, a description which refers to the dealer placing a consumer in a car "on the spot", to get the sale, only to "yo-yo" them back at a later date for additional funds. Played to perfection, a dealer can reap thousands of dollars in unearned fraudulent gain.

What to know about Spot Delivery: If you signed purchase documents and registration applications and if you obtained insurance for the vehicle, had a new license plate put on the car and/or had your old plate transferred, the car belongs to you.

Spot Delivery happens to unsuspecting consumers throughout the United States. It is very popular with dealers in Pennsylvania, New Jersey and Delaware. If you find yourself in this situation, the chances are good that you have legal remedies available to right this wrong.

Tools to Protect Yourself from Spot Delivery or Dealer Fraud:

– Remember that if you have signed papers, you own the car, regardless of whether the vehicle has been financed.

– Your credit was good or the dealer would not have delivered the car to you at the price you agreed to pay

– A finance document showing payments, deposit, interest rate and other financial items is a binding contract, giving you specific legal rights.

– You own the car subject to making payments only. The dealer cannot change that once you take possession.

– Keep all copies of your paperwork and anything else associated with the sale (including calendars, photographs, advertisements). If the finance manager asks for your papers at any time for any reason, refuse! Keep these documents in a safe place, not the car.

– If you are called back to the dealership to sign additional papers, either do not go or do so in a different car than the one you bought.

– Have a friend or spouse drive you and witness whatever is being told to you. This will prevent the dealer from taking your car as hostage, an all too common happening.

– If a dispute arises with the dealer over the contract and the dealer demands the car is returned, park it in a garage or remote location until the matter is resolved, to prevent it from being taken against your wishes.

– Put together a complete timeline of everything that happened from the time you thought of purchasing the car until the car was taken away. Try to remember specific names of dealership personnel and any statements that were made to you during conversations with the sales and finance staff.

– Keep track of all monies you had invested into the purchase, including registration, insurance, down payment and trade. Never pay cash and always get a receipt!

If you believe you are a victim of a Spot Delivery scam and wish to discuss it with a consumer attorney, call 1-800-LEMON-LAW (1-800-536-6652) or contact us by e-mail. Remember to leave a daytime telephone number where you can be reached. Based on the information you provide us, an attorney will meet with you to discuss your claim. If we do decide to represent you, the process will be cost-free.