Interviewer: What happens if your car is repossessed, for instance? Can you get it back with an attorney’s help?
Can You Get Your Vehicle Back After Repossession?
Andrew Campbell: Well, if the car is repossessed it is not always best to get your car back.
To understand this you have to understand whether the car was something of value to begin with. As bad as things are you have to determine if you are better off without the vehicle.
If the car was not working or was not reliable then a client might want to consider other options. They could walk away from the vehicle keep all evidence of fraud and attempt to find alternative methods of transportation.
You would keep this evidence so if in four years or so they sue you have the evidence to defend yourself for that wrongdoing.
That is one way to approach it depending upon the facts and circumstance. In the end if the dealer seizes and sells the vehicle that will certainly be damage to the consumer.
If in fact there was some type of fraud in the deal to begin with and the vehicle was sold there are potential damages based upon the value of what was lost.
So first you want to figure out whether the vehicle has value. If it doesn’t and the dealer seizes it you have to deal with a debt.
In some circumstances you have no choice. A dealer might simply seize it.
Depriving someone’s Ability to Drive: Repossession Is an Act of Exercising Substantial Dominion over a Vehicle
If you apprise a dealer of all the wrongdoing, they will give the car back and then claim, “Oh, there was no illegal repossession because we never sold the vehicle.”
Dealers almost never do this. They end up selling the vehicle and permanently depriving the consumer of their vehicle.
Well, you still took control of the vehicle. You still exercised what’s called substantial dominion over the vehicle.
Interviewer: But they’ve deprived you of your ability to drive.
Andrew Campbell: Exactly. There are all sorts of ways to prevent people from driving. Let me give you another example.
The dealer would give you a temporary registration. Once the title is sent to the secretary of state, which is required, then the registration can be filed and you can get new license plates or you can transfer your current plates.
It Is Illegal to Issue Two Temporary Registrations
But in Michigan, it’s illegal to give more than one temporary registration. Some dealers will not, for one reason or another, file that application for title with the state within 15 days as required by law.
They end up giving the consumer a second temporary registration, which is not legal.
That’s actually a criminal act for them to do.
If you get stopped by the police and you have more than one temporary registration, the police will start asking you questions, because that’s illegal.
What they’re trying to do is they’re trying to extend the time that you drive the vehicle out so they can keep trying to get a better deal with the finance companies, which is illegal.
In Michigan, if a Mobile Home Is Not Affixed to the Ground, It Is Considered a Vehicle
Interviewer: Oh, okay. How about for mobile homes? I have heard those are considered vehicles.
Andrew Campbell: All of this is controlled by the Uniform Commercial Code, and the Uniform Commercial Code is a summary of all commercial type contract law in the United States.
What they did is somebody went throughout the United States, found out all the local laws with regard to contracts, and consolidated them.
Generally speaking, everyone follows one or two different ways of doing things. They adopt these rules into their law.
Part of the changes in the year 2000, the UCC changes, article nine, which controls secured transactions, which means, you buy a home with security, if you buy a car and you get it financed, it’s secured. If you don’t pay for it, it’s going to be repossessed. That’s what secured means.
The code changed and Michigan adopted some of those changes.
The new rule is that if your mobile home is cemented into the ground, that is a home and any loan you get is a mortgage that must be recorded in the register of deeds.
If the mobile home is not cemented into the ground, then it is a car, and you have a title for the car. That’s how that works.
Many People Who Purchase Mobile Homes Are Financed by Simple Interest Loans
With financing on mobile homes, you might still have the same kind of scams.
You certainly could have the same kind of scams.
Frequently with mobile homes, I see a lot of bad loans. I see a lot of simple interest loans, and simple interest is usually given out to people who have fairly bad credit.
Simple Interest Loans Reward Early Payment but Have Strict Penalties for Late Payments
Simple interest loans are the type of loans that rewards early payments, but penalizes late payments.
It gets very, very complicated, but the more likely that you pay late or the more often you pay late, the more interest you have to pay.
It’s so bad that people will pay on a loan for 30 years on a mortgage, and they’ll go into the bank to make what they think is their final payment, but what they don’t understand is, they were late.
25 years ago they had some tough time where they were unemployed and they made 12 late payments.
Then they go to make their last payment, and they say, “Oh, this is my last payment” and they say, “No, you still owe $12,000 because the interest has accrued on all those payments that were late.”
Why Are Unscrupulous Practices More Common at Used Car Dealerships?
Interviewer: On these auto loan problems, why do you think they happen with used car dealers and not new car dealers? Is it because you have poorer people that aren’t as sophisticated that need high risk loans or what?
Andrew Campbell: I think it’s because of the subprime market. Exploiting people in that market is a lot more tempting.
There is a lot more interest that can be charged and there are a lot of churning scams as well.
Those people buying at those locations will not have a lot of money anyway. They often think hiring a lawyer is going to cost them several thousand dollars, which is true in most instances.
But, consumer lawyers often will charge must less in many circumstances because they know the strength of particular cases.
Most Attorneys That Handle Consumer Cases Do Not Require Upfront Payments
Interviewer: That’s what you do? You charge nothing up front?
Andrew Campbell: It depends on the situation. For some cases that I know will be successful I can take that risk.
In some cases I have to charge something. I will usually want some money to be put towards costs of the case.
The dealer’s always going to tell people, “Oh, attorneys are going to charge you money. Don’t go to an attorney.”
Or, they’ll misrepresent the law.
People just don’t know what the law is, so they can’t really use it to protect themselves, especially if maybe they did make a mistake on the application. Maybe something wasn’t perfect.
If You Make an Unintentional Error on a Loan Application, It Does Not Constitute Fraud
That doesn’t mean it was fraud. You have to have intent to commit fraud, and the representation that was wrong must be material.
If you only made a minor mistake somewhere, that doesn’t mean it was a material misrepresentation.
Interviewer: Does Material means important?
Andrew Campbell: Yes, Material basically means important.