$50,000 Settlement in Car Dealer Forgery Case
Most people expect the worst when they go to a car dealership. After they leave, they feel like they were taken advantage of or deceived, but are not sure how it happened.
One sure way to know if something has gone wrong is if the monthly statement from the bank has a higher car payment than what was agreed to at the dealership. Surprisingly, this happens more often than most people realize. In this case, our client began receiving bank statements with a monthly payment that was over $24/month more than what she agreed to.
This blog provides a detailed, inside look at allegations of how a Waldorf, Maryland car dealership submitted forged documents to JPMorgan Chase in order to make an additional profit off at least $1,516 in a transaction involving a 63-year-old, single, female immigrant from Trinidad and the West Indies, and how they paid $50,000 to settle the case. The allegations of forgery and fraud discussed in this blog arose from the contract documents that have been provided below.
Whitney, LLP represents consumers in a variety of fraud, deception and forgery claims against new and used car dealerships involving sales and leases. Surprisingly, although forgery is a state and federal crime, and by submitting forged documents to banks the crimes of wire fraud and bank fraud are committed, dishonest car dealerships engage in it with alarming regularity. Our car dealership fraud and deception attorneys have represented clients and filed lawsuits in alleged forgery cases that occur at both new and used car dealerships including but not limited to Nissan, Toyota, Volkswagen, Hyundai and Mercedes Benz new car dealerships.
Whitney, LLP’s lawyers have found that, on average, 1 out of every 5 sales and lease contracts that we review contains a forged signature, including e-signatures.
A Story of Car Dealership Forgery and Fraud at a Waldorf, MD Car Dealership
On February 16, 2019, our client, referred to as “Ms. K”, went to a Waldorf, MD dealership to purchase a car. After selecting a Hyundai Elantra (the “Vehicle”) that she liked with a price of $19,910.84, she signed a Buyer’s Order with the Balance To Be Paid At Delivery of $24,683, including tax, tags, negative equity on her trade-in, GAP Insurance and a pre-paid maintenance plan.
Also on February 16, 2019, Ms. K then signed a Retail Installment Sales Contract, with an APR of 10.04%, Finance Charge of $8,413.96, Amount Financed of $24,683, Total Amount of Payment of $33,096.96, and Total Sale Price of $33,096.96. Her monthly payments were $459.68 for 72 months. “Government Taxes” were listed as $954.66.
After signing these documents, Ms. K received a flashdrive of copies of all the documents she signed. She did not return to the dealership at any time after February 16, 2019 to sign more documents.
When the Monthly Car Payments are Higher than Agreed To
In March 2019, Ms. K received the first monthly bill for the Vehicle from JPMorgan Chase Bank NA. However, the payment due was $483.88 instead of the $459.68 she had signed and agreed to on February 16, 2019. The payment was $24.20 higher than she agreed to.
Ms. K then went to the dealership and met with a finance manager, “Laura”, to discuss what she believed was a mistake. Laura told her “she would get it fixed.” However, the monthly statements continued to be the higher amount. Ms. K returned to the dealership to meet with Laura every month when she received her monthly statement in April, May and June 2019 to ask why her payments continued to be $483.88 instead of the $459.68 she had signed and agreed to.
She was repeatedly told by Laura that the payment amount would get fixed. During the course of these monthly visits, Laura gave her one free car wash, one gas ticket to provide a full tank of gas, and $140 that was supposed to cover the increased payment for several months. During one of these meetings, Laura told Ms. K that she had reached out to the bank and they had fixed the problem.When Ms. K then called the bank, she was told that no one from the dealership had called to discuss the loan.
On the fourth month that Ms. K went to the dealership to meet yet again with Laura to discuss having the payment corrected, she was informed that Laura was no longer working at the dealership. Instead of giving up, like many customers do when faced with a stonewall defense, Ms. K’s daughter got involved, called the dealership and explained the situation to the finance manager who had replaced Laura. Despite the second finance manager telling her that the matter would be discussed with a manager, no one reached out to Ms. K to discuss the situation or to correct it.
After being stonewalled, and then ignored, by the dealership, our client contacted Whitney, LLP for help. After hearing the story of being Ms. K being strung along for months, and seeing the obvious red flag of the monthly payment being higher than what was agreed to, we knew there was a serious problem.
Allegedly Forged Retail Installment Contract Submitted to JPMorgan Chase
Subsequently, on August 8, 2019, Whitney, LLP obtained a copy of the Retail Installment Sales Contract that had been sent to JPMorgan Chase Bank NA. It was then that we realized what had actually happened, and that there had been no “mistake.” The Retail Installment Sales Contract obtained from JPMorgan Chase Bank NA was dated February 28, 2019, which was twelve days after Ms. K went to the dealership, and contained four signatures of Ms. K’s name that she had not signed.
The allegedly Forged Retail Installment Sales Contract contained the following figures: the same APR of 10.04% as the original contract, an increased Finance Charge of $8,930.52 instead of $8,413.96, an increased Amount Financed of $26,199 instead of $24,683, an increased Total Amount of Payment of $35,129.52 instead of $33,096.96, and an increased Total Sale Price of $35,129.52 instead of $33,096.96. Her monthly payments were listed as $487.91 instead of $459.68 for 72 months.
The allegedly Forged Retail Installment Sales Contract also changed, among other things, the “Government Taxes” from $954.66 to “N/A”; and added an “EasyCare Extended Warranty for $1,617.” 24. The addition of aftermarket services to a second Retail Installment Sales Contract is done not to benefit the unaware customer. Rather, the Finance Manager and/or dealership increase their profit by increasing the number of aftermarket services they “sell” to a customer. This is referred to in the car sales and finance industry as “product penetration.”
Upon receiving the allegedly Forged Retail Installment Sales Contract, which had the monthly payment listed as $487.91, Ms. K contacted JPMorgan Chase Bank NA to request the actual Retail Installment Sales Contract that matched up with her bank statement dated July 26, 2019. That bank statement listed her interest rate at 9.75% and her monthly payment as $483.88. She was told they did not have the original document, and had only received the one they had sent her. She received no explanation as to the disparity between all of the figures.
Alleged Fraud and Forgery Lawsuit Filed Against Waldorf, MD Car Dealership
After obtaining the allegedly forged Retail Installment Sales Contract, Whitney, LLP filed a lawsuit alleging Fraud, Fraudulent Concealment, violation of Maryland’s Consumer Protection Act, and Invasion of Privacy. The Complaint included allegations that Sheehy Hyundai violated Maryland law, including:
- The Maryland Transportation Code Ann., § 15-312(b) titled “Prohibited Acts – – Vehicles Sales Transactions,” reads as follows: “Making material misrepresentations in obtaining vehicle sales contracts. – A dealer or an agent or employee of a dealer may not make any material misrepresentations in obtaining a vehicle sales contract.”
- The Maryland Transportation Code Ann., § 15-312(c) titled “Prohibited Acts – – Vehicles Sales Transactions,” reads as follows: “Fraud – – A dealer or an agent or employee of a dealer may not commit any fraud in the execution of or any material alteration of a contract, power of attorney, or other document incident to a sales transaction.
These are common causes of action in cases alleging fraud and forgery at car dealerships. Every state has its own laws regulating the purchase and sale of vehicles, and has similar laws to the ones Maryland has set forth in the Maryland Transportation Code – Prohibited Acts – Vehicle Sales Transactions.
Finding a Pattern of Forgery in a Car Dealership Lawsuit
Generally, when a set of forged documents is submitted to a bank in order to gain an additional profit, it may very well not be the first time it was done. After all, forgery is a brazen act, and the chances of it being caught the first time it is done are pretty small. Whitney, LLP has provided representation in other cases involving multiple customers discovering alleged forgeries committed by the same finance manager over an extended period of time.
In this case, to determine whether or not this was the first time the same finance manager had committed the alleged forgeries, in the lawsuit we requested several months of deal files that had been done by the same finance manager. The purpose in doing this is to get the Buyer’s Orders and Sales and Lease Contracts for prior customers, and determine if they have similar monthly payments discrepancies.
When the dealership refused to provide this information, we filed a motion with the Court to compel them to produce, and our motion was granted, meaning that the dealer was now court-ordered to produce. The dealer then filed a motion fighting that order, and we responded. While these arguments were happening in the Court, the case reached a settlement.
$50,000 Settlement for Alleged Forgery and Fraud Claims
After several weeks of negotiations, the case settled for $50,000, including the original contract monthly payment of $459.68 being reinstituted. The $50,000 settlement provided compensation to our client for the emotional distress she suffered, and allowed her to pay off her car loan, if she chose to do so.
Generally, emotional distress is a large component of car dealership forgery cases. If a car dealership is willing to use confidential personal information to submit fake bank documents, what is to stop them from applying for a credit card, opening a bank account, taking out a loan, or even selling the information on the Dark Web? These are all valid concerns that a victimized car buyer may have.
Car buyers who suspect they are victims of fraud should monitor their credit reports carefully after being victimized, and may want to subscribe to a credit monitoring app such as Credit Karma or a similar application.
How to Tell if My Car Contract or Lease was Forged?
Everyone who has purchased or leased a car, truck or SUV in at least the last five years should check and make sure they have not been victimized by the fraud and forgery. It is free to do and well worth the few minutes it takes.
Here is how to determine if your signature was forged on a Sales or Lease Contract:
- Are the monthly payments you agreed to at the dealership, and which are listed on your copy of the paperwork that you received, different than the monthly payment amount on the bank statement from the finance company?
There is no legitimate reason that a monthly car payment would change without requiring the customer’s signature and agreement to change the contract terms.
If your monthly payments are off by even just a penny, or especially a dollar, ten dollars, or more, that likely means your signature was forged and the contract terms were changed after you left the dealership.
However, some dealerships and finance managers take time to cover their tracks when committing forgeries and defrauding a customer. They cleverly rely on their financial expertise to keep the monthly payments the same, and do so by changing other terms in the contract. They can still be caught, but their actions are not so obvious.
- Check the car loan balance on your credit report
If the “amount financed” for the car loan on the contract you received at the dealership is different from the balance listed on your credit report, your signature was likely forged.
When the balance is higher than you agreed to, it is a huge red flag, and one of two things likely happened.
- First, the dealership may have simply added several thousands of dollars to the price of the car, and extended the term by multiple months to make room for the additional money, and hiding it with the extra payments. Or, as alleged against Sheehy Hyundai, an additional amount is simply added to the amount financed.
- Second, the interest rate is decreased without the customer’s permission, and the amount financed is increased to make up for the offset in decreased interest rate, thereby allowing the dealership increase their profit by thousands and still keep the payment the same.
For example, in one case our client noticed a balance of $30,000 on his credit report instead of the $28,000 his paperwork showed. Sure enough, his signature had been forged, and his payments were the same.
- Call the finance company, get a copy of the sales contract they received from the dealership, and compare the two side-by-side.
Comparing finance documents is the simplest way to determine if you have been a victim of forgery and fraud.
Simply call the finance company and ask them to send you a copy of the sales documents that the dealership sent to them. They are obligated to send you a copy at no cost, and will email, fax or mail it within a few days. You may also be able to logon to the finance company’s website and download your documents.
Then, compare what the finance company has on file with the copy you received at the time you bought the car. If you see differences, it is time to take legal action. While consumers can always file a complaint with their state’s administrative agency that regulates car dealerships, which in Maryland is the MVA, the MVA will not help the customer obtain compensation. At best, the state administrative may require the dealership to honor the original terms, and take administrative action.
Establishing the Value of Your Forgery Claim Against a Car Dealership
Once forgery has been detected and the dealership is made aware that they have been caught, the dealership, and their lawyer, will usually downplay it. Do not fall for this.
The standard first response is usually “the customer’s payment is the same, I don’t see what the big deal is.” Or, “it is only a few thousand dollars difference, we will cut them a check for that and the problem is solved.”
These common responses do not take into account the illegality of the act itself, ignore the emotional distress that a customer often has once realizing their signature has been forged, and fail to take into account the legal liability, including punitive damages and state-imposed administrative actions, a car dealership faces for forgery.
Although Whitney, LLP routinely represents victims of forgery and fraud against car dealerships, we commonly hear these excuses. Of course, once a lawsuit is filed, they often get serious. Consumers who are not aware of the true value of their claims and are unrepresented may very well settle their case for far less than its actual value.
How to Avoid Car Dealership Forgery
The best way to avoid the potential for forgery is to provide your own financing. Either pay with a check, or finance the vehicle through your credit union. When financing the vehicle through the credit union, you can get a check overnighted to you in the exact amount of what you are financing.
By having that check, and not financing through the dealership, you remove a significant opportunity for the dealership to play games with the numbers and cheat you.
Whitney, LLP Offers Free Car Contract Review and Free Legal Consultations
If you determine that your signature was forged at the car dealership, or if you simply would like to have your documents reviewed, Whitney, LLP can help.
We provide our free Car Contract Review service, and can handle the process of obtaining your contract from the finance company and comparing it against your original paperwork. In all potential claims against a car dealership, we provide a free consultation.
If you need assistance with a problem with a car dealership, call us at 410 583 8000, or use our Online Quick Contact form to get started.