Car Lease Fraud

Car lease fraud

Q: What is automotive lease fraud?
A: Leasing a car can be difficult to understand, even for sophisticated car buyers. The lease terms can be ambiguous and consumers often do not fully understand the lease or its obligations. This confusion permits dealers to walk consumers into deals which are grossly unfair. A common example of lease fraud would be where a dealer fraudulently represents to a consumer that he or she is buying a car, when in fact they are signing documents for the leasing of the vehicle. Another common example would be the dealer representing that certain expensive add-ons, like service contracts, are required when in fact they are not. Rolling “negative equity” into a car lease without a proper disclosure is both common and illegal—“negative equity” refers to unpaid finance charges from a trade-in vehicle that will not be covered by reselling or re-leasing the trade-in, in other words, when a car is “upside-down”. Car leases are usually less favorable for many consumers, while more profitable for many dealers and finance companies. Auto fraud can also include making important misrepresentations about the financial terms and obligations of a vehicle sale or car lease.

Q: What are some common examples of car lease fraud?
A: Leases are fundamentally financial transactions, and thus the types of fraud that dealers commit usually involve something to do with the financing. Concealing a consumer’s obligations under the lease (i.e. not disclosing mileage or condition penalties on turn-in, which often trap consumers unaware) is a frequent issue. Dealers and leasing companies will often ruin a consumer’s credit and harass the consumer with aggressive debt collection for lease-end penalties for excess mileage and vehicle condition, and such conduct often gives rise to viable consumer protection lawsuits. The “negative equity” issue is a common one: dealers are supposed to be very, very clear in disclosing how much negative equity there is in any trade-in vehicle, and the negative equity must be very specifically and clearly disclosed in the lease document. If it is not and you suffer damages, then you may well have a lease fraud case. Misrepresenting a lease as a sale is a common form of lease fraud. There are many different types of lease fraud. If you find out that something is wrong or fraudulent with your lease, you can contact us for a free case evaluation, and we can let you know if you have been the victim of a fraud and also if the case is worth pursuing.

Q: What can I expect if I file a lease fraud lawsuit?
A: Lease fraud cases can be lucrative for both consumer and attorney, if they can be proved. Juries and judges alike do not take kindly to fraudulent concealments of material financial terms with vehicles or other major consumer items. In general, the greater the magnitude of fraudulent concealment or misrepresentation, the stronger the case will be. My office generally does not file charges over small amounts of money, but when the fraud causes losses in the thousands to the consumer, we get involved. Also, we are expert at handling credit damage lawsuits, and lease fraud cases often result in wrongful credit report damage situations. This aspect of these cases can add value as well. Each case must be evaluated on an individual basis, which we are willing to do free of charge.