16 CFR Part 455 Used Motor Vehicle Trade Regulation Rule; Project No. P087604 #563688-00129

Submission Number:
T. Michael Flinn
Georgia Consumer Lawyer
Initiative Name:
16 CFR Part 455 Used Motor Vehicle Trade Regulation Rule; Project No. P087604
I oppose the proposed amendments to the Used Car Buyer's Guide Rule. The proposed amendments make the rule weaker and less effective rather than better for consumers. I am a consumer lawyer for Georgia. I have represented consumers for 27 years. I have read the text of the Notice and the reasoning behind the proposed rule. The current Buyers Guide is defective and need improvement but the proposed amendments make it worse and less effective to protect consumers. The goal of the Buyers Guide should be to deliver as much information as possible into the hands of consumers who are looking at vehicles. The goal of the Buyer's Guide should not to provide a shield from misrepresentations it makes in the sale. In the Notice, the FTC repeatedly took the position that consumers should go out and get information rather than having the same information made available to all consumers looking at a specific vehicle. This "everyone must protect themselves attitude" approach merely invites fraud by the more sophisticated upon those with less access to information. Instead of inducing fraud, the FTC should mandate that the Buyers Guide be an information device that conveys to all consumers the necessary information for a vehicle to be properly priced by the market. Providing this information not only protects consumers from fraud but strengthens and enhances our economic system. Specifically, the following changes should be made to the proposed rule- 1. As currently proposed, the new AS IS statement misrepresents that no remedy is available for other express statements. This is not the law in Georgia which specif8ically allows for fraud and Fair Business Practices Act claims to be made where a dealer lies or misleads a consumer about the quality of car before the sale. In an AS IS sale the seller is disclaiming two common concepts that are ordinarily implied in sales- fitness and merchantability, tort claims of fraud and Fair Business Practices Act claims should not be interfered with. The legal effect is denying responsibility for repairs, but the actual statement is to deny that the car is fit to be a car at all. In states like mine that allow such sales, the FTC should mandate that the truth be told. Therefore, the AS IS disclosure should first state "THE DEALER DENIES RESPONSIBILITY FOR ANY REPAIRS" followed by a sentence that summarizes that the dealer denies that the vehicle is fit to be sold as a car. Most consumers do not really know what AS IS means and the Buyers Guide should honestly tell them. In Georgia, we frequently see dealers sell cars without valid passing emissions, This FTC buyer's guide proposal would provide safe harbor for the dealer that commits such a crime. 2. I agree with other comments that the NMVITS should be checked by all car dealers prior to selling any car and then a disclosure made about it. All the dealer must do is accurately represent whether a title brand or damage appears in the database and the date the database was checked. 3. Known defects should be disclosed. A car that has a known defect should not be sold without disclosure of the defect. This information is necessary for the market to properly price the vehicle. If a dealer knows a defect exists, it should be listed. In a recent case, the dealer bought a car at auction where it was announced as frame damage. The dealer sold the car to the unsuspecting consumer telling the consumer that the car had never been wrecked and produced a clean carfax to confirm-all the while knowing the car had been wrecked. The dealer pointed to the FTC buyer's guide to say that it had no responsibility. Under Georgia law this is not correct. But your proposed language would arguably shield such conducts.