Client Melvin Pittman and Attorney Jimmy Hurt interviewed by CBS 46 about the City of East Point Class Action Lawsuit

Client Melvin Pittman and Attorney Jimmy Hurt interviewed by CBS 46 about the City of East Point Class action lawsuit.

Posted by Hurt Stolz, P.C. on Wednesday, December 28, 2016

FTC Amends Used Car Rule; How to Challenge “As Is” Car Sales

Reposted with permission from National Consumer Law Center, www.nclc.org/library.

The FTC on November 10 issued a final rule amending its Used Car Rule, 16 CFR 455. The Rule chiefly requires dealers to affix a sticker on used cars for sale, disclosing whether a warranty accompanies the vehicle. The existing Rule is described in detail at NCLC’s Consumer Warranty Law § 15.6.

This article explains how the new amendments strengthen this disclosure, but the Rule still provides only limited assistance to the many consumers who purchase used vehicles “as is.” This article then lists 15 legal theories to challenge vehicle defects even when the vehicle is sold “as is.”

The New FTC Amendments

The FTC changes to the Used Car Rule go into effect January 27, 2017, but dealers can use their existing supply of sticker forms for an additional year.

The new rule adds a new requirement that must be disclosed on stickers affixed to all used cars for sale, directing consumers to obtain a vehicle history report and to check for open recalls. The sticker informs consumers that related information can be found at www.ftc.gov/usedcars and www.safercar.gov. Even more detailed information on summary vehicle history reports can be found at NCLC’s Automobile Fraud § 2.3 and for full reports from state registries at § 2.4.

The amendment changes the language on the sticker describing an “as is” sale. The old language arguably misstated the law by saying: “The dealer assumes no responsibility for any repairs regardless of any oral statements about the vehicle.” The language the FTC initially proposed in its new rule as a replacement would have been even worse: “The dealer is not responsible for any repairs, regardless of what anybody tells you.” After opposition from consumer groups, the language is now changed to “The dealer does not provide a warranty for any repairs after sale.” Since the Rule prohibits the dealer from making an “as is” disclosure when there is a warranty under state law, this is an accurate statement.

The new sticker also improves disclosures for service contracts and unexpired manufacturer warranties, increases Spanish language disclosure information, and adds air bags and catalytic converters to the sticker’s list of major defects that can occur.

Private Remedies for Rule Violations

While there is no private right of action for violation of an FTC Rule promulgated under the FTC Act, there is a private right of action for actual damages and attorney fees for violation of an FTC Rule promulgated under the Magnuson-Moss Warranty Act. See NCLC’s Consumer Warranty Law § 2.7. Interestingly, as explicitly pointed out by the original rule’s statement of the authority under which it was adopted) and in the Supplemental Information to the new rule amendments, the Used Car Rule was promulgated under both statutes. (The supplemental information states that certain of the new amendments were promulgated under the FTC Act only but other provisions are pursuant to the Magnuson-Moss Warranty Act). As a result, many violations should be actionable under the Magnuson-Moss Warranty Act. Id. § 15.6.9.2.

As to violations related to portions of the rule promulgated only pursuant to the FTC Act, violations should also be violations of a state UDAP statute, prohibiting deceptive practices, and offering strong private remedies. Id. § 15.6.9.1.

15 Ways to Defeat an “As Is” Disclaimer in a Used Car Sale

Many used cars, particularly lower end cars, are sold “as is,” and dealers like to claim that this immunizes them from all consumer claims. The law cannot be more different. Here is a listing of 15 ways to litigate a used car case even when the vehicle is sold “as is.”

  • 1. A car sold “as is” still has a warranty of good title–that the transfer is rightful, and that the car is delivered free from liens–unless excluded by specific language or by circumstances that give the buyer reason to know that the seller may not have clear title. Id. § 15.2.
  • 2. Express warranties cannot be disclaimed. Express warranties can be created by representations or even descriptions on sales documents, the odometer reading, and oral statements. See § 15.3.
  • 3. Federal law provides that a dealer that “makes any written warranty” or “enters into a service contract” cannot sell a car “as is.” § 15.4.3.
  • 4. Used car lemon laws in Hawaii, Massachusetts, Minnesota, New Jersey, New York, and Rhode Island generally eliminate “as is” sales and provide strong consumer remedies. § 15.5.2.
  • 5. Every state has enacted a new car lemon law that may provide remedies not just to new cars, but also to demonstrators or for fairly recently manufactured used cars. § 15.5.3.
  • 6. Minimum standards for used cars are created by statute in Arizona, California, Connecticut, Illinois, Maine, Nevada, New Mexico, and Pennsylvania. § 15.5.4.
  • 7. California, the District of Columbia, Kansas, Louisiana, Maryland, Massachusetts, Minnesota, Mississippi, Oregon, and West Virginia all prohibit disclaimers of implied warranties (including “as is” sales) for used cars and other consumer goods. § 15.5.5.
  • 8. State vehicle inspection laws in 13 states require an inspection shortly after a used car sale and may provide a remedy even in an “as is” sale where the vehicle does not pass inspection. § 15.5.6
  • 9. All in all, 32 states have statutes that limit “as is” sales in some fashion. § 15.5.7.
  • 10. Acceptance of a vehicle can be revoked where there is a nonconformity that substantially impairs its value. § 15.7.
  • 11. State UDAP statutes in every state apply to oral or written misrepresentations or the failure to disclose defects or a wreck, flood, or other salvage history, even where a vehicle is sold “as is.” § 15.8.3.
  • 12. Common law tort claims such as fraud, negligence, strict liability, and good faith duty to disclose known defects, apply despite the “as is” sale. See § 15.8.4 and § 15.8.5.
  • 13. The federal odometer statute, including $10,000 minimum damages and attorney fees applies, despite the “as is” sale, to odometer misrepresentations, mis-disclosures or tampering. § 15.8.6.
  • 14. Laundered lemons (undisclosed re-sale of vehicle previously returned as a lemon) are subject in most states to a special statute that applies despite the “as is” sale. § 15.8.7.
  • 15. Other automobile fraud statutes provide consumers with a remedy where prior physical damage or prior use is not disclosed, or where air bags are not properly replaced, even when a car is sold “as is.” See NCLC’s Automobile Fraud § 7.2.

Can utility company charge new tenant for a previous occupant’s bills?

Reposted from the “Ask Consumer Ed” article from the Georgia Attorney General’s consumer protection unit.

Dear Consumer Ed:

Can a utility company charge me for a previous tenant’s utility bills? I am a new tenant in a rental home. The owner passed away last year, and apparently after the medical bills were paid, there was no money left in the estate. I am now being told that I cannot get electricity or water service until these bills are paid. Who is legally responsible – me or the estate that is financially broke at this point?

Consumer Ed says:

While we cannot give legal advice, as a general rule, a tenant in a residential property who has no connection to a previous occupant is not responsible for paying the utility bills attributed to the previous occupant’s use.

Furthermore, if you are renting a house, the utility provider may be prohibited from denying you service because of the previous tenant’s unpaid bills.

For example, Georgia law prohibits a public or private water company from refusing to supply water to a new residential tenant because the prior owner or occupant owes it money.

With regard to electricity, if your power company is regulated by the Georgia Public Service Commission, it is prohibited from denying you service on the basis of a previous occupant’s unpaid bill. If your provider is a municipally-owned electric system, you would have to either refer to your city’s code of ordinance or contact your municipal utilities department. Similarly, if your provider is an electric membership corporation (EMC), you would have to contact your local EMC provider to inquire about the rules and regulations that apply to you.

If a utility company insists that you are responsible for the previous occupant’s bills or refuses to give you service until those bills are paid, you may want to ask it to show you in writing where the Public Service Commission or other authority permits it to take this action. The utility companies may simply need to update their billing records to reflect that a new tenant will be occupying the home and start up the utilities under your name.

If you unable to resolve this situation, you may want to consult an attorney about your options.

My Social Security number was compromised in a security hack.

Re-posted from the Georgia Department of Law’s Consumer Protection Unit.

Dear Consumer Ed:

I just heard about a security hack that left my Social Security number out there.  How can I protect myself?

Consumer Ed says:

Identity thieves use Social Security numbers for a variety of purposes:  to file tax returns, to apply for government benefits, to obtain employment, to open credit cards, bank accounts and/or take out loans, or get medical care. If you think your Social Security number was compromised during a hack, follow these steps:

Contact the Social Security Administration. An identity thief may use your Social Security number to get work. If the employer then reports that individual’s income to the IRS using your Social Security number, you might have issues later because it will appear as though you didn’t report all of your income to the government. You can contact the Social Security Administration to review your earnings record by calling 1-800-772-1213 or visiting www.socialsecurity.gov/myaccount.

Contact the Internal Revenue Service (IRS). An identity thief who has used your Social Security number to obtain a job or file a tax return might try to change the address on file with the IRS in order to have a tax refund sent directly to him or her. To contact the IRS Identity Protection Unit, call 1-800-908-4490 or visit www.irs.gov/uac/Identity-Protection.

Place a security freeze with each of the three credit bureaus. A security freeze (also known as a “credit freeze”) locks your credit file so that no one can see your credit report or credit score unless you lift the freeze. Since banks and lenders access your credit file in order to determine whether or not to extend credit to you, a security freeze will prevent an identity thief from using your information to get a credit card or loan. You will need to contact each of the credit bureaus to place the credit freeze:

Equifax.com
1-888-766-0008

Experian.com
1-888-397-3742

TransUnion.com
1-800-680-7289

Get copies of your credit reports.  You can get free credit reports each year by going to annualcreditreport.com. Review your reports carefully. If you come across any accounts or collection items that you do not recognize, contact the credit bureaus to dispute the matter and get it resolved. Note that under federal law, you are entitled to one free credit report each year from each of the three major credit bureaus. Georgia residents are entitled to an additional two free credit reports per year from each of the bureaus.
For more information, visit the Georgia Attorney General’s Consumer Protection Unit’s website at www.identitytheft.georgia.gov.

I’m on the hook for a loan I never signed

[Reposted from the “Ask Consumer Ed” column of the Georgia Attorney General]:

I  have been placed as a co-signer on a student loan for my grandson. I never signed for this loan. When I contacted the loan provider they told me that I  “e-signed” for this loan. I don’t know what information was provided to verify my identity, but now I am on the hook for $95,000. What can I do to rectify this since I never signed the loan?

Consumer Ed says:

In Georgia, the law on e-signatures is governed by the Uniform Electronic Transactions Act, which means that electronic signatures are guaranteed the same force and legal-effect as traditional paper signatures.  That being said, basic contract law still applies, so for you to be bound to the contract, both parties must have the intent to form a contract, have notice of the transaction terms, and give proper consent to the terms.

When determining the enforceability of a particular electronic signature, the context, actions and circumstances of the parties are taken into account.  Authentication of a signer’s signature is critical here. The loan provider must show proof that the agreement was actually signed by you.  If the signature is being disputed in court, evidence such as the signer’s IP address or the use of an email account can be used to verify the identity of the signer.  In some instances, courts have found e-signatures unenforceable where, for example, someone else routinely uses the computer (IP address) that the signer uses.

It is important to know what it means if the loan is enforced against you.  By co-signing a loan, if your grandson stops making payments, you will have to make the payments for him.  The law in Georgia says that a lender can immediately start collecting from a co-signer if the borrower misses a payment.  Also, if your grandson misses any payments, this can also hurt your credit score.

If you did not sign for the loan then you should contact an attorney to discuss your options.

I keep on getting past due letters for a product I never ordered. I’ve tried to explain the error to the company, but I never get responses; I only get past due notices with additional fees. What should I do?

Above all, don’t be pressured into paying for goods or services you never ordered. Many of these so-called “invoices” appear at first glance to be legitimate bills, and may include threatening or confusing legal jargon to create a false sense of urgency to pressure recipients into making quick payments. Scammers are hoping that you’ll simply pay the bogus bills without checking them out.

Another variation on the phony invoice is a solicitation that is designed to look like a bill. It may contain a required legal disclaimer that says in large boldface type: “THIS IS NOT A BILL. THIS IS A SOLICITATION.” Unfortunately, this disclaimer is often absent or obscure. If you’re deceived into paying for the solicitation, you may never receive the goods and services advertised, and will probably have little to no luck in contacting the company, let alone getting them to refund your money. If you don’t see the above disclaimer, don’t assume it’s a legitimate invoice.

The following are steps you should take to avoid falling into this trap:

Verify. Search the name of the company sending you an invoice to see if others are reporting similar issues or other problems. Check a company out with the Better Business Bureau (www.bbb.org), and also try doing an online
search using the company name and words like “complaint” or “scam.”

Carefully read all invoices and solicitations that are sent to you. Check account numbers and the name of the company sending you an invoice. If you do receive a bill that appears to be legitimate, or from a legitimate company, look it over carefully for the name and location of the company sending the bill. If there is any difference (no matter how small) between the name of the business entity which sent the “invoice” and the name of a legitimate business, this is likely an indication that the invoice is phony.

Contact the company. If you ever question an invoice that you have received, call the number on the invoice. Legitimate businesses will have direct contact information, and will welcome questions. Ask for a purchase order or other supporting documents. An inability to contact the sender at the number provided is also an indication that the bill is a fake.

File a complaint. If you’re getting bogus bills, file a complaint with the FTC at www.ftc.gov/complaint, as well as with the Better Business Bureau. If the scheme involved and/or was sent to you via the U.S. mail, submit a Mail Fraud Complaint Form to the U.S. Postal Inspection Service. You also should alert the Georgia Department of Law’s Consumer Protection Unit online at www.consumer.ga.gov, or by calling 404-651-8600.

Odometer and dealer sticker on used car did not reflect true mileage

[Reposted from the “Ask Consumer Ed” column of the Georgia Attorney General]:

I bought a car at a used car dealership. The sticker on the window read “89,000 Miles” and the odometer reflected the same number. The paperwork the dealer gave me had the same mileage but also had “TMU,” which means “true miles unknown.” I now want to return the car because I discovered through an AutoCheck vehicle report that the car actually has 300,000 miles on it. The dealer is saying I can’t return it. Help!

Consumer Ed says:

Under these circumstances, you may have limited options in returning or refunding your vehicle if, as appears to be the case, the dealer correctly disclosed the vehicle mileage. Federal law requires sellers to disclose the miles on the odometer, and, if the seller knows that the odometer reading is different from the number of miles the car has actually traveled, include a disclosure indicating the true miles are unknown. It appears that the dealer who sold you this car made the appropriate disclosure to ensure that you knew the 89,000 miles odometer reading was inaccurate.

You may still have some recourse, however, if you can show that the dealer knew the actual vehicle mileage at the time of sale. If the dealer knows the real mileage, then he or she must disclose that number and is not lawfully able to hide a higher odometer reading by using the “TMU” designation.

Clearly, at some point, the vehicle odometer was altered. Although not necessarily suggested by these facts, it is possible the dealer may have unlawfully manipulated the odometer reading. AutoCheck may be helpful in determining the approximate time the odometer discrepancy occurred. If the appearance of this discrepancy coincides with the dealer’s purchase or acquisition of the vehicle, this could suggest the dealer unlawfully altered and/or replaced the odometer and then disclosed the mileage as “TMU” in an effort to cover its actions. The law prohibits sellers from changing the odometers in this fashion and misusing the “TMU” disclosure. Both of the instances above would be an unfair and deceptive practice under the Georgia Fair Business Practices Act as well as under applicable federal law. You may have a claim under these laws if you can prove the dealer engaged in these practices.

With very few exceptions, however, purchasing a used car is an activity that is almost always at the buyer’s risk. Unless you can show that the dealer knew the real vehicle mileage or altered the odometer to begin with, you may be stuck with your higher-mileage vehicle. You can visit the website of the Department of Law’s Consumer Protection Unit at www.consumer.georgia.gov to learn more about your rights in these situations or to file a complaint against the company.

U.S. Supreme Court to Decide Whether Class Action Defendants Can Bribe Their Way Out of Legal Trouble

[Reposted from www.publicjustice.net]

By Leslie Brueckner, Senior Attorney

The U.S. Supreme Court is poised to decide an issue of huge importance to everyone who cares about access to justice. The question, in Campbell-Ewell v. Gomez, is whether corporate defendants in class actions are entitled to bribe class representatives to abandon the rest of the potential class members.

Yes, you read that right. According to the corporation who was sued, it should be allowed to cancel out a class action against it simply by offering to settle the named plaintiff’s individual claims. Under the defendant’s view of the law, corporations accused of ripping off millions of people could avoid accountability by repeatedly picking off the few named plaintiffs who are willing to step forward. Campbell-Ewell has even gone so far as to argue that class representatives are bound by such offers, accepted or not, even if it effectively denies all other class members the ability to obtain any relief at all.

The craziest part about the theory they’ve put forth is that it turns the whole notion of adequacy of representation 180 degrees. As we explained in an amici brief we just filed with the Court (along with the AARP), one of the most basic rules of class actions is that class representatives are supposed to represent the others impacted by the wrongdoing. Not only is this required by Rule 23 (the federal class action rule), it’s also required by the U.S. Constitution (due process, anyone?). This means not just that the class representatives are supposed to be competent, they are also supposed to be loyal to the rest of the class members. And that means the class representatives are not supposed to file potential class actions just to make money for themselves, they are supposed to be standing up for everyone in the class.

But if Campbell-Ewell’s lawyers are to be believed, the basic ethical and constitutional premises of class actions were just flipped. They say that corporate defendants in class actions have the right to bribe class representatives to abandon everyone else. And in their view, even if a class representative wants to do the right thing and reject an individual payday so they can stand for the entire class, Rule 68 strips away that possibility, and the court must dismiss the whole case for lack of subject matter jurisdiction.

If the Supreme Court agrees with Campbell-Ewell, it could spell disaster for the ability of injury victims to obtain any compensation whatsoever via class action suits. Class actions make it economically possible for injured consumers, civil rights plaintiffs, and low-wage workers to pursue claims for relatively small damage amounts for wrongs that would otherwise go unremedied. A Supreme Court ruling that would allow defendants to shut down class actions simply by “picking off” named plaintiffs could wipe countless cases – and countless consumers and others who would benefit from those cases – off the litigation map.

Hopefully, the Court will see this tactic for what it is: a form of bribery that turns the very idea of class representation on its head.

– See more at: http://www.publicjustice.net/content/us-supreme-court-decide-whether-class-action-defendants-can-bribe-their-way-out-legal-troubl#sthash.9w6nHSVt.dpuf

Q: I’ve been looking for a new apartment. The leases that I have read are over 5 pages long and are full of a lot of legal terms that I don’t understand. What are the most important things I should look out for?

Reposted from the “Ask Consumer Ed” article of the Georgia Governor’s Office of Consumer Protection:

A: Your frustration is understandable. Leases can be overwhelming, even to those accustomed to reading them. Georgia’s Department of Community Affairs has a Landlord-Tenant Handbook available on its website (www.dca.ga.gov) that can give you some guidance, but in particular, here are some important things you should look for before you sign:

  1. Rent and length of the lease – While the landlord may have told you the basic information about the lease, it is important to get the key terms such as monthly rent and length of the lease in writing. This protects you from later changes in price or terms.
  2. Utilities – Leases can differ dramatically in this area. Determine if you are required to place the utilities in your name, pay the landlord for utilities, or if they are included in the rent. This can have drastic impacts on the cost of the apartment, so you need to know upfront what you are obligated to pay.
  3. Security deposit – Most apartments require a security deposit when signing the lease. Find out how much this is and what will be deducted when you move out. Most landlords conduct an inspection before you move in and after you move out to check for damages and deduct the repair costs from the deposit.
  4. Termination and renewal procedures – The lease should state what happens at the end of the lease term. This includes the deadlines and procedures for notifying the landlord that you are either moving out or extending your lease. Be aware of any automatic rent increases that occur if you decide to renew the lease.
  5. Subletting and Subleasing – It is important to know whether you have the ability to leave the

apartment before the lease is up. Leases are often commitments for a year or more and landlords have different rules regarding your ability to lease to another person should your circumstances change.

6. Pets – Some landlords do not allow pets, while others may restrict the number, size or type of pets permitted. Many will charge a pet deposit, which may or may not be refundable. Make sure you are clear about these terms and have budgeted for any additional deposit due.

7. Renter’s Insurance – Remember that your landlord’s insurance does not cover your belongings, only the building itself. If your furniture or belongings are damaged due to fire, theft, or a natural disaster, you’ll be out of luck if you don’t have renter’s insurance. The good news is that renter’s insurance is very affordable, and you can generally purchase it from the same company that insures your vehicle.

Even though a lease can be long and complicated, you should always read it thoroughly before signing it. Be wary of a landlord who seems in a rush for you to sign before you’ve read through the entire document. If you cannot understand the terms of the lease, have someone who is familiar with lease agreements, or an attorney, review it with you to make sure that you fully understand what you are agreeing to before you sign the lease. Do not leave any blanks to be filled in later. Either get them filled in or cross through them, initial each cross-out and have the landlord do so also. Finally, insist upon getting your own copy of the lease, and save it so that you can review your rights and responsibilities should a dispute ever arise.

Can a car dealer charge a restocking fee if my loan is not approved?

Reposted from the “Ask Consumer Ed” column of the Governor’s Office of Consumer Protection.

Is it legal for a car lot to charge a re-stocking fee and 50 cents per mile on a car because the loan was not approved?

A:  It sounds like you entered into a conditional sales agreement known as a “spot delivery” transaction. With spot delivery, the buyer takes possession of the vehicle “on the spot,” upon making a commitment to finance the vehicle, but not yet having a definite arrangement for financing with a bank or finance company. It would appear that you negotiated loan terms with the dealership and agreed to buy the car only if a lender agreed to finance the deal according to those terms.   The car remains the property of the dealership until a lender finances the deal. Since the dealership was not able to find a lender to finance your deal, the dealership may be entitled to order you to return the car and to pay for its temporary use.

The amount that you may be charged for using the car depends on the agreement you signed prior to taking the car off of the lot. Dealers who offer spot delivery usually require potential buyers to sign a “bailment agreement” outlining what would happen if the dealer was unable to secure financing with a bank or finance company. If you signed a bailment agreement, and if it includes a reasonable restocking fee and per-mile fee, then these fees are likely legal.

However, even if the fees are legal, the dealer could still be in violation of the Governor’s Office of Consumer Protection’s Auto Advertising and Sales Practices Enforcement Policies. For example, if the dealer represented that you had been approved by a prospective lender prior to your purchasing the vehicle, it would be unfair and deceptive for the dealer to require you to return the vehicle for an alleged failure to obtain lender approval. In that event, the dealership should also return any down payment you made on the vehicle if you are denied credit approval and choose not to pursue any other financing options.

You have additional rights if you traded in a vehicle as part of your transaction. First, the dealer should have retained both title and possession of any such vehicle until financing is actually approved. Second, if you choose not to execute another finance agreement for the purchase of your vehicle, the lot must immediately return your old vehicle to you. If you believe the car lot engaged in any of these prohibited practices, you may file a complaint with the Governor’s Office of Consumer Protection by visiting www.ocp.ga.gov/consumer-services/filing-a-complaint, or calling 404-651-8600.

To avoid this situation in the future:
Prepare in advance. Shop for financing as you shop for a vehicle. Ideally, arrange for financing ahead of time through your bank or credit union so you know the amount of money you can borrow. At least contact them to find out what interest rate you would qualify for, so you can compare this with the dealer’s financing offer.
Read through all documents thoroughly before you sign. If there are any blanks left in the contract, you and the dealer should complete them before you sign. Ask questions if there are items you don’t understand.
Get everything in writing. Insist in advance on a written assurance that if your financing should fall through, your deposit and your trade-in will be returned to you; or, if credit terms change, you may cancel the deal.
Wait until financing has been approved. If you do work with the dealer to secure financing, seriously consider waiting until financing has been approved before you take possession of the vehicle.