FTC Exploring Issue of Yo-Yo Sales, Other Leasing Ripoffs
The FTC roundtable also will address what has been learned about auto sales, financing and leasing at two previous roundtables; what consumer and business education initiatives would be useful; and any practices that may harm consumers significantly or that are widespread such as the yo-yo sales where a consumer thinks a car lease has been completed only to have the dealership take the car back.
The FTC program, the third of its kind this year, will include panels on:
- Understanding the Motor Vehicle Leasing Process
- Misrepresentations and Other Consumer Protection Issues in Motor
- Vehicle Leasing
- Consumer and Business Education: What, If Anything, Is Needed
- and What Works?
- Which Practices, If Any, Cause Significant Harm to Consumers, and
- What Are Potential Solutions?
- Which Practices, If Any, Are Widespread, and What Are Potential
A Michigan attorney who has represented hundreds of consumers in disputes with some of the largest financial institutions in America will be among the speakers at the program. Ian Lyngklip, senior member of Lyngklip & Associates Consumer Law Center, PLC, Southfield, has been invited by the FTC to be a panelist on a workshop it is sponsoring entitled "The Road Ahead: Selling, Financing & Leasing Motor Vehicles."
"A spot delivery, or yo-yo sale," says Lyngklip in a news release, "happens when the car dealer sells the consumer a vehicle and completes all the steps necessary to sell the car including executing a contract of sale, signing title, taking a down payment and turning over the keys. After the transaction is finished, the dealer calls the consumer back claiming the deal has fallen through. In some instances the dealer uses fraudulent means or forcible repossession to take the car back."
"Furthermore," adds Lyngklip, "these consumer frauds happen regularly when the dealer learns that it cannot make as much money as it expected on the transaction or when a finance company refuses to buy the deal or purchase it on the terms that it had originally agreed to with the dealer. Either way, the consumer has a binding contract and has every right to expect the dealer to honor it. If the dealer does not honor the contract, the consumer may lose a down payment or trade-in vehicle."
The FTC’s first roundtable, on consumer protection issues involving dealership sales and financing of cars, SUVs, and light trucks, was held in Detroit in April. The second roundtable, on military consumers’ experiences in buying and financing motor vehicles, the role of financial literacy in consumers’ understanding of that process, and fair lending issues, was held in San Antonio in August.
The roundtable will be held at the FTC’s Conference Center, 601 New Jersey Avenue, N.W., Washington, D.C. It is free and open to the public.
Pre-registration is not required but is encouraged to help staff plan the event and to expedite attendees’ passage through security. Details can be found at the program's website. The FTC will offer a live webcast of the event. The Commission staff will identify and invite people with relevant expertise to participate and may invite others to participate who have submitted requests.
Those who wish to submit comments on roundtable topics or on motor vehicle sales, finance and lease issues more generally may file comments per instructions on the web-based form. The FTC will accept comments on roundtable topics or on motor vehicle sales, finance and lease issues until at least January 31, 2012. More information will be posted at http://www.ftc.gov/bcp/workshops/motorvehicles/ as it becomes available.