Interviewer: What scenarios can you help people when their car is repossessed and how would you help them? What are the steps?
It Is Important to Contact an Attorney as Soon as You Are Asked to Return a Vehicle
Andrew Campbell: If you just went to the used car dealer and you put a down payment on a vehicle and they call you up and say, “Hey, the financing fell through. You got to come back in.” Or, “You got to bring the car back in.” You should immediately call a knowledgeable consumer attorney.
Any car dealer that does this is breaking the law. But it is very important to keep all of your paperwork. Make sure you take anything in the car that’s personal including any car financing documents that are still in the vehicle, get them out of the car because you need those documents later on.
All car dealers must guarantee financing. They cannot tell you that financing fell through because they must guarantee financing. If a bank denies a loan, the dealer must accept payments and must tell the consumer that they will do so.
This rule has been in place for many years and still dealers, even larger dealers don’t seem to know this rule.
Make sure you keep every single document that you sign. That applies to any transaction, not just car dealers.
Dealers that do this yo-yo the customer. They sell them the car, then bring them back to re-sign (always at terms better for the dealer). Or even worse the repossess the vehicle. Completely illegal.
If You Have Not Received the Title to the Car within 15 Days the Dealer May Be Engaging in an Unethical Practice
If they repossess that car and they have the documents from the sale, they’ll just shred those documents. Then you don’t have any proof to show that you actually bought that car.
In the state of Michigan, a used car dealer has to file an application for a title within 15 days. They don’t want to do that unless the deal is financed.
Many times they’ll hold off and they won’t file within the 15 days, and then they’ll have you come in and sign a new application for title. That’s when you should be suspicious.
Also if they give you more than one temporary registration that constitutes a criminal act under the Michigan Vehicle Code.
If You Are Suspicious, You Can Record Conversations between the Dealer and Yourself for Evidence
If you’re going to talk to these dealers, you’re going to want to record your conversations with them on the phone. Obviously in the state of Michigan, if you do that, you have to make sure that the person you’re talking to is in the state of Michigan and that you’re in the state of Michigan, as well.
You can record the conversation as long as no one else is listening. As long as it’s just between you and the other person, you can record the conversation.
Interviewer: Do you have to disclose it to them or no?
Andrew Campbell: No, you do not. Now that doesn’t mean I can extort money from you or anything. It doesn’t mean I can use that in any negative way, but that’s just simply evidence. This is because what you want to do is you want to make sure that the dealer doesn’t use certain defenses later on.
In other words, if you call him up and say, “I heard you want my car back, but I thought my financing was guaranteed.” Then they might say, “Oh, well, there was just an accident, and you know, it was just a mistake on our part.” If you get that on recording right then, that prohibits a defense later on, where they always claim, “Oh, you committed fraud. You lied on your application.”
It Is Important to Retain All Paperwork from the Dealer
Also, you must retain all paperwork you receive from the dealer for evidence. There have been times where they purposely left off a signature on the credit application.
Interviewer: That’s why you want your own copy of the documents, because their version could have been doctored and if you don’t have a copy you can only rely on their version?
The Application for Title Is a RD108 and Will Contain a Complete Description of the Vehicle and All Associated Fees with the Purchase
Andrew Campbell: Exactly. The application for title’s called the RD108. The RD108 contains all the terms of the deal. It’s all there. It’s all one piece of paper and it indicates the trade in, the mileage, all the fees, the price you’re going to pay, and a description of the vehicle. That RD108 is really important.
Interviewer: Well, what about the terms of the agreement themselves? Is there usury? Or are some of the loans so ridiculous that they’re made where no one could ever pay it back?
Other Unethical Practices Concern Service Contracts Purchased When a Used Vehicle Has No Warranty
Andrew Campbell: That is actually less likely to happen. In Michigan you can charge 25% interest, that’s not so much a problem. Sometimes there are scams with the service contract, for example, when you buy a car and there’s no warranty on it.
You might be offered a service contract, and a lot times a dealer will pocket most of that money. Service contract might be $1600 but the dealer receives about 80%, and it is just a kickback from the warranty company. The warranty company’s really never going to do anything anyway. They’ll just deny any claims that come in. Those are scams, too.
Sometimes the money, the $1600 that’s paid in for a service contract is never even forwarded to the service contract company. It’s just pocketed by the dealer. Then the dealer hopes you don’t make a claim. That happens, as well.