Department of Regulatory and Economic Resources - Consumer Protection
16 CFR Part 455 Used Motor Vehicle Trade Regulation Rule; Project No. P087604
The proposed Rule allows auto dealers the option of checking a box on the BACK of the form regarding whether there is a manufacturer's warranty in effect. The FTC would allow a regulated industry to provide notice about critical information on the BACK of a document, where consumers are unlikely to see it at all, particularly since (with relatively rare exceptions) the Used Car Buyers Guide must be posted on the inside of the car, facing out, where the back isn't even visible to consumers when they approach the vehicle. Most consumers are not expecting crucial information to be located on the back of the document The propsed Rule requires dealers to provide misleading, inaccurate, sweeping, blanket advice mandated by the FTCto consumers, judges, and others regarding the meaning of "AS IS" sales, which will discourage consumers with valid fraud claims from even seeking advice from consumer advocates, state attorneys general, or others. The existing language is misleading, particularly since a whole body of case law now establishes that even when vehicles are sold "AS IS," this is not a shield against committing fraud. The proposed language is even worse than the existing language. Existing: AS IS = NO WARRANTY. YOU WILL PAY ALL COSTS FOR ANY REPAIRS. The dealer assumes no responsibility for any repairs regardless of any oral statements about this vehicle. Note: Currently, as a matter of law, in all 50 states, the dealer may actually be responsible for repairs, as well as for providing a total refund, actual and compensatory damages, attorneys fees, and potentially punitive damages. Proposed: AS IS - NO WARRANTY. THE DEALER WON'T PAY FOR ANY REPAIRS. The dealer is not responsible for any repairs,regardless what anyone else may tell you." Note: If the FTC itself states that the dealer is not responsible, regardless of the facts of the individual case, regardless of what state law may hold, and regardless of what information state AGs, consumer advocates, and/or consumer protection attorneys provide consumers, this will give dealers and defense attorneys a new shield against legitimate cases -- even when they commit fraud -- and may be interpreted to override state law -- setting us back decades of progress in preventing and policing fraud. The proposed Rule fails to require dealers to inspect vehicles prior to sale to determine their condition, or even whether the vehicles are safe and fit to drive. The proposed Rule fails to require dealers to simply disclose KNOWN vehicle defects. The proposed Rule allows dealers to continue to offer "50/50" warranties, including when the consumer must obtain parts and labor from the dealer as a condition of the warranty, making it easy for dealers to jack up the price so that consumers end up paying 100% of the actual price of repairs The propsoed Rule fails to require dealers to check NMVTIS or disclose the results of any vehicle history reports, putting the burden on consumers -- who typically lack access to computers when they are on the lot shopping for vehicles, and have to pay exponentially more than dealers to access the information. The agency fails to recognize that many consumers cannot access the information at all, due to the practical realities of car buying, a very real Digital Divide, or the lack of access to credit (typically, it takes a credit card to access a vehicle history report).