16 CFR Part 455 Used Motor Vehicle Trade Regulation Rule; Project No. P087604 #563688-00163

Submission Number:
Bernard Brown
The Brown Law Firm
Initiative Name:
16 CFR Part 455 Used Motor Vehicle Trade Regulation Rule; Project No. P087604
I am a consumer attorney, and have centered my practice on handling consumer car fraud cases for 30 years. I've tried 27 car fraud jury trials to a completion as lead trial counsel, and I've handled many cases on which there were published appellate and federal trial court opinions. Our office over the years has reviewed and investigated many thousands of car histories and car fraud complaints. And I think it is fair to say that I know a lot about the law and the legal system in this realm. At this point I'm writing above all to go on record with the FTC, with all other "law enforcement" agencies state and federal, and with anyone else who may review this rulemaking issue, about my view that the FTC is behaving as a textbook example of "regulatory capture" - helping and running cover for the corporations against whom it is supposed to be enforcing the law. I'd like to be writing in hopes of helping persuade the FTC to take action - including with this Rule - that would actually benefit, instead of harming, consumers. But, honestly, I see very little hope of that. The FTC says, at P. 74756 of the Federal Register, section IV B 5 a: “damage history would not be an indicator of current mechanical condition and forced disclosure of it could reduce dealer incentives to ascertain damage and repair it”. That is one of the more outrageous statements I've ever seen by any law enforcement agency, and here it is coming from what should be the chief national consumer protection agency. Ask any consumer across the country whether a vehicle's damage history would seem significant in determining the vehicle's current mechanical condition, and particularly in helping toward finding out if the vehicle is safe. Please find one expert who would say that a vehicle's damage history has no bearing on a vehicle's mechanical condition. As to the second part of that quote: Again, please explain how the FTC arrived at the bald statement that "forced disclosure of [a vehicle's damage history] could reduce dealer incentives to ascertain damage and repair it”. There isn't any logic to that statement. And it's an astonishing statement: the FTC is actually saying that if a dealer knows it is selling a totaled rebuilt wreck, or a Hurricane Sandy flood vehicle, the dealer should NOT be required to disclose that. Let me know when the FTC stops saying such awful and outrageous anti-consumer things, and I'll readily help any way I can with rulemaking. Until then, thinking people should regard the FTC as a simple example of "regulatory capture". A few short comments on specifics in the FTC's proposal: First, the FTC proposes that the Buyer's Guide should say, with respect to vehicles sold "as is": "AS IS - NO DEALER WARRANTY THE DEALER WON'T PAY FOR ANY REPAIRS. The dealer is not responsible for any repairs regardless of what anybody tells you." That last line is blatantly false. I'll just cite to a single case showing just how false that is, though I can point to many, many others: the case of Vicki Grabinski versus Blue Springs Ford here in Kansas City. Here are the two published cases on it: Grabinski v. Blue Springs Ford Sales, Inc., 136 F.3d 565 (8th Cir. 1998); and Grabinski v. Blue Springs Ford Sales, Inc., 203 F.3d 1024 (8th Cir. 2000); cert. denied, 531 U.S. 825. Ms. Grabinski was sold a totaled vehicle "as is", and won a fraud judgment totaling over $200,000. Second, it is truly exasperating that the FTC isn't requiring dealers to check the NMVTIS to see if a vehicle is reported as "salvage", and to disclose that. California does it. NMVTIS is a federal database. NMVTIS is the ONLY database that is getting insurance data on totaled cars (not Carfax, not Autocheck, no others). There is practically no cost. Again, this is anti-consumer. Third, again, sales of vehicles with unperformed recalls should absolutely be prohibited, and simply checking for recalls required.