Most people don’t read every single word of the contract they sign when they purchase a car or truck. They don’t have a law degree or an accounting background so they trust the explanation they receive from the salesperson or financing manager. Unfortunately, sometimes that trust is misplaced and the buyer becomes a victim of car dealer fraud.
How Car Financing Fraud Happens
There are a few examples of financing fraud:
- “Bad” Credit: The salesperson said you were approved for financing at a low interest rate, then came back and told you your credit rating was bad, forcing you into a higher interest rate contract. They may have lied about your credit score.
- Misrepresenting the Price: The salesman told you the price of the car but when the paperwork was put in front of you for you to sign, the Total Cash Price was higher. In car financing fraud cases, sometimes the buyer is told the destination and dealer prep costs “weren’t included” … but those fees are part of the featured sales price. Adding them in a second time is fraud.
- Blank Documents: Another trick is getting you to sign a document that’s blank or not fully filled out. The salesperson then inflates the numbers or misapplies financing charges and you’re on the hook for a bigger monthly payment.
- Forcing Options: Some dealers say that you can’t get a reduced price or special financing if you don’t buy a variety of “options.” If it’s an option, it’s optional. If you were forced to buy things you didn’t want, that could be auto dealer fraud.
- Charging a Higher Price for a Cash Sale: Believe it or not, some car dealers try to charge buyers MORE money if they want to pay cash for their car. Cash price violations are illegal. The price of a car is the price of a car. It’s not more or less because you pay cash, finance it in-house, or get your own financing.
Proving Car Dealer Fraud
Auto dealer fraud cases can be brought under the Texas Deceptive Trade Practices Act if you suffered financial losses. Talk to a consumer protection lawyer if you think the dealer:
- Lied to you about your credit rating or the value of your trade-in vehicle.
- Misrepresented the conditions of your loan or your purchase agreement.
If you have a valid case, you can be compensated for financial losses, plus attorney fees, so you lose nothing out of pocket by bringing a case. If your lawyer can prove willful or intentional deception, a judge could order punitive damages up to three times the amount of your financial loss. Talk to a Dallas auto dealer fraud attorney to see if you have a case.