Attack of the Attorneys General

Installment #1: Florida – GPS Tracking, Fake Reviews, and a $5 Million Wake-Up Call

This is our new monthly offering, ATTACK OF THE ATTORNEYS' GENERAL, where we will explore an AG action aimed at a car dealership or finance company. For our first installment, we are going to start out in my adopted state of Florida and examine an action taken a few years ago by the Florida AG against a dealership, its related finance company and its owner. The allegations of wrongful behavior were numerous and read like a laundry list of deceptive and abusive acts and practices:

The Allegations

• Tracking customers using GPS devices without the customers knowledge or consent

• Using the GPS devices to locate and repossess vehicles, including in some instances where the accounts were current

• Increasing installment payments by adding optional items to transactions without the customers' knowledge (payment packing)

• failing to honor the limited warranty, and delaying servicing of vehicles until after the warranty expired

• creating fake online profiles of consumers in order to post positive reviews

We can also add poor or non-existent complaint management to this list, because my understanding is that there were dozens of complaints filed with the Better Business Bureau, AG's office, and even news media.  

The Outcome

The defendants ultimately entered into the consent decree that provided, among other things:

• $ 5 million in debt forgiveness for impacted customers

• Bar against reporting the accounts to credit reporting agencies 

• Payment of close to $ 300,000 of attorney's fees and costs

• Paying its own attorney's fees

• Loss of business from publicity, distractions to staff, etc. - these rarely get discussed but are very real costs that harm business

Crucial Take-aways

Have your customers sign a form expressly acknowledging the existence of a GPS device and the privacy implications of using such a device. Some states have laws that mandate this, while in all other states this is certainly a best practice. This is even more important when starter interrupt devices are being used. We see a lot of poorly drafted forms and inconsistent disclosures when it comes to these devices. 

If you're even a little unsure how your documents or processes handle GPS disclosures, review protocols, or warranty claims , this is your warning shot.

There should be ample disclosure of any products being sold to the buyer, including on any buyer's order and retail installment contract. The theory of "Express informed consent" is alive and well, even without the FTC's CARS Rule going into effect, so get a document "check-up".

Failure to live up to a limited warranty is a "get the business" violation and can lead to all sorts of legal problems as well as negative publicity, so have a plan in place to demonstrate what repairs are covered and whether any "out of pocket" costs will be incurred. Also, it's a good idea to communicate whether repairs come with any sort of warranty of their own.

The Federal Trade Commission has been offering a lot of guidance on posting of reviews and has taken a hard stance against "cherry-picking". For those of you that only post your 5 star reviews, we suggest you study up on the FTC's pronouncements and make sure your process is in order.

Ignite's Plan to Combat AG Attacks

These kinds of threats are common, we see them all the time, and we want to help. Most of these problems could have been avoided with a comprehensive document review. We don’t just talk about this stuff, we fix it. That’s why, for August, we’re offering a special: $499.00 deal jacket review to the first ten dealers that respond, $699 for all others. 



We'll go through a recently originated deal, document by document, and weigh in on what we think needs improvement. We'll also issue a written summary that documents our findings. Spend $499 now and potentially save thousands of $$$$s, if not your entire business. This isn't just paperwork. This is risk management. Email us at Info@IgniteCP.com or call us at 682-499-0325 and let’s get started.