• Preventing Car Dealer Scams and Protecting the CA Consumer - The New Law Will be Effective July 1, 2012
  • February 29, 2012 | Author: Hovanes Margarian
  • Law Firm: Law Offices of Hovanes Margarian - Sherman Oaks Office
  • With one of the most sophisticated consumer law statutes in the U.S., California Dealer Fraud Law is now moving a step farther to protect consumers against consumer fraud committed by automotive dealerships. Until now the consumers have been obliged to do their own research to get a fair and scam-free deal, but now thanks to the new CA Law AB 1215 the car dealers will have to do that for the consumer.

    As surprising as it may seem, according to the Bill signed by California governor Jerry Brown back in September, the law mandates that both used and new car dealers verify the condition of their used cars using a federally run database. If any significant problems are uncovered during the verification process, the car dealer must warn consumers with a red “buyer beware” sticker. Starting July 2012, every car dealer in the state of California will need to check all the used cars using the National Motor Vehicle Title Information System, adopted in 2008.

    This new bill is completely one of a kind and makes CA Consumer Law even stronger against car dealers who make money mostly thanks to consumer unawareness and dealer fraud. Obviously most of car dealers are dissatisfied with this change and some of them even officially opposed against the bill. Among them is the used car giant CarMax, whose representative testified against the bill during a hearing in July.

    In order to mitigate car dealers’ dissatisfaction, CA law now allows dealers to charge consumers with higher document fees; both new and used car dealers can charge up to $80 document fees whereas before the bill new car dealers had an upper limit of $55 and used car dealers only $45.