Can a car dealer or creditor tell my employer I am late on a lease payment?

April 16, 2015 14:12 by Consumer Ed

Dear Consumer Ed: 

I have been leasing a new car for the past seven months.  I was late on a payment for the first time, and someone called my office and told two of my managers that I owe them money. That is absolutely none of my managers’ business.  Not only was that bad business, but was it also illegal?

Consumer Ed says: 

While calling your employer and divulging your private financial information is certainly a distasteful tactic, it may not actually be illegal.  To answer that question, a little more information is needed.  First, it is important to find out who actually called your office.  If it was a third-party debt collector and not your actual creditor, you are likely protected by the Fair Debt Collections Practices Act (“FDCPA”), which prohibits certain kinds of contact, including calls to your employer or other third parties for any reason except to verify your employment and/or your location.  In that case, you should notify the debt collector in writing that you do not wish for the collector to continue contacting you or your employer without your express permission.  If the communications continue, go to www.consumer.ftc.gov and file a complaint with the Federal Trade Commission.

If, however, the phone call came from your actual creditor, and not a third-party debt collector, then you probably would not be protected under the FDCPA.  However, there may be other protections available. For example, if your actual creditor is a bank or other financial institution, there may be other federal protections that would prohibit it from disclosing this information, provided there’s no language in your sales contract permitting it to do so. You should take a look at your loan documents to determine what the agreement says about the creditor’s ability to disclose information, and whether there is any kind of grace period before your account gets sent to collections.  There could be statements allowing or restricting communication to third parties; most such agreements will also specify whether you’re entitled to written notice before your account goes into collections.  If the language of the document permits it, or if your employers are listed on the agreement as either credit references or as sources to provide confirmation about your current employee status, the creditor may have some leeway to call them to inquire about you.


On the other hand, if there was language in the sales agreement that set a specified grace period and the creditor ignored it, and/or if there was nothing in the agreement that implicitly permitted contact with your employer, then the actions could still be considered a violation of Georgia’s Fair Business Practices Act.  To file a complaint, you can contact the Governor’s Office of Consumer Protection at 404-651-8600, or visit our website at www.consumer.ga.gov.

You can also report his behavior to the Better Business Bureau.  Go to www.bbb.org to find your local Better Business Bureau chapter, and follow the prompts if you decide to file a complaint. This will inform other potential customers of these bad business practices and hopefully help end any abusive behavior.

If you enjoyed this post, make sure you subscribe to my RSS feed!

Rate This


Car sales price is higher than advertised price

March 31, 2015 14:57 by Consumer Ed

Dear Consumer Ed:

I responded to an ad for a car on a website listed for $24,799. When I spoke to a salesman, he said the price is actually more than $1800 higher. He explained this difference was because the advertised price includes discounts and rebates that I did not qualify for. I asked him to show me where this was stated on the website, and he was unable to do so. What are my options?  

Consumer Ed says: 

From what you’ve said, it sounds like the dealer is claiming the advertised price factored in a special incentive program that wasn’t disclosed in the ad. A special incentive program is one involving rebates, discounts, and/or financing that does not apply to all of the buying public. Auto dealers are permitted to offer such programs; however, because only a small percentage of the buying public usually qualifies, the dealer may not factor in these types of discounts in the advertised price. Special incentive program discounts may be included in an advertisement, but must be listed as a separate, additional discount available only to those who qualify.  Information about the specific qualifications required to receive the discount must also be included clearly and conspicuously in the advertisement.  The advertised price should be the price available to all of the buying public.

Because the dealer incorporated special incentives and discounts in the pricing, the Governor’s Office of Consumer Protection considers this to be a violation of the Fair Business Practices Act (“FBPA”).

If you have a copy of the advertisement, you could consider contacting the dealer again and asking that the original advertised price for the vehicle be honored.   You can also submit a complaint to the Governor’s Office of Consumer Protection at www.consumer.ga.gov, or by calling 404-651-8600.

If you enjoyed this post, make sure you subscribe to my RSS feed!

Rate This


Car dealer has not paid off loan on trade-in

December 18, 2014 18:06 by Consumer Ed

Dear Consumer Ed: 

We traded in my wife's car 3 months ago and the dealer still hasn't paid off the loan. We've called them countless times and we are getting nothing but the run-around. Now the car has gone up for repossession. What do we need to do?

Consumer Ed says: 

Trusting car dealers to pay off your loan can be risky:  if the dealership fails to pay off your loan, you’re the one responsible to the lien holder.  You’re responsible for all loans that you signed a contract for – even on vehicles that you’ve traded in and no longer have in your possession.  The dealer’s failure to make payments on your previous vehicle could have a negative impact on your credit score, and lead to a lawsuit against you from the company that financed the car that was traded-in.

Since your vehicle is in the process of being repossessed, the best thing to do first is to consult a private attorney immediately; he/she can assess the particular facts of your potential claim and provide you with individualized legal advice.  That attorney can also contact the dealership and lenders on your behalf. Additionally, there are several other actions you can take to mitigate the situation:

  • Look at the documents related to your transaction with the dealership, such as the auto sales contract. See if your trade-in was included as part of your new-car purchase and if the dealership promised to pay off the loan on your trade-in.  If you have the dealership’s promise in writing, it is easier to make a convincing case to the finance companies.
  • Then you should contact the company that is financing your trade-in and explain that the car should have been paid off by the dealership and that the car is physically in the dealership’s possession.  If your contract with the dealership states that the dealership promises to pay off the loan on your trade-in vehicle, provide a copy of that contract to the finance company.  You should also provide the dealership’s street address and phone number, because the finance company is allowed to repossess the vehicle when the loan is in default.  Ask them to work with you so that your credit is not negatively impacted by the dealership’s default or late payments.
  • You should also contact the company that is financing the new car that you bought from the dealership.  Provide copies of the sales contract with the dealership, and explain to the new lender that you had traded in your car, but the dealership failed to pay off the loan as it promised.  Talk to the new finance company about taking the new car back and cancelling the that contract, or lowering the new loan to make up for what you still owe on the trade-in.


Pay special attention if the outstanding balance on the loan for the car you traded in is more than the trade-in value.  For example, if the outstanding balance on the loan for your trade-in is $18,000, but your car is worth only $15,000, the dealership may include the $3,000 in the new car loan.  This is called “negative equity.”  If you’re buying a $30,000 car from the dealership, then you’d be signing for a $33,000 loan.  As a result, you could end up paying a substantial amount more for your new vehicle if the dealership defaults on your old loan.

If you enjoyed this post, make sure you subscribe to my RSS feed!

Rate This


Credit/Debt
nav_cap