Car dealer delaying paying off trade-in vehicle loan

February 4, 2011 22:09 by Consumer Ed

Dear Consumer Ed:

Are auto dealerships in Georgia required to pay off trade-in vehicles within a certain time frame?

Consumer Ed says:

No, there is not a time frame set by law, although the dealer should not delay once your new loan has been funded.  Remember – until the dealer pays off your old loan, you will remain responsible for maintaining insurance and making all payments on your old vehicle.  As a result, if your new car purchase includes trading in a car with an unpaid lien balance, be sure to get a promise, in writing, from the dealer regarding the trade-in payoff date.  Make sure that it requires the payoff to be made before your next scheduled car payment is due.  Then, follow up with the lender to be sure that the payoff was actually made.

Trading in a vehicle is a convenient option for some consumers.  When done correctly, it allows consumers to leave their trade-ins at the dealership and be responsible for only one payment to one lender.  When done improperly, however, consumers are stuck with two car payments and a trade-in vehicle that may be in the possession of the dealership.  In worst case scenarios, some dealerships have sold the trade-ins before the loans are paid off.

If you find yourself in a situation in which the trade-in loan is not paid, contact a private attorney immediately.  You can also contact the Governor’s Office of Consumer Protection at 404-651-8600 or 1-800-869-1123 (toll-free in Georgia, outside of the metro Atlanta calling area).  Failing to deal with the issue could lead to damage to your credit score and a potential lawsuit against you from the company that financed the trade-in.

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Storage Unit Belongings to be Sold at Auction

December 8, 2010 17:46 by Consumer Ed

Dear Consumer Ed:

I was unable to make my last three payments on my storage unit. I found out that there is a notice in the paper to auction off my belongings. How can I stop this?

Consumer Ed says:

If the rent has not been paid, the owner may be allowed to sell the contents of your storage unit. However, before your belongings can be sold, he must take certain steps.  First, he can only sell your property to recoup back rent if you are more than thirty days behind on your payments.  Next, you must be notified, in writing, of his intent to sell your belongings.  The owner must deliver this notice to you in person, or send it by certified or overnight mail.

The notice must allow you more time to make the payment in full; at a minimum, the owner has to give you an additional fourteen days to pay.  It must also tell you that if payment is not received, your belongings will be advertised for public sale.

After the fourteen days has expired, the owner must then advertise the sale in a local newspaper, once a week, for two straight weeks. If you pay the back-rent in full before the date of sale advertised in the newspaper, the owner does not have the right to sell your belongings, and you may collect them.

If the owner has not complied with all of these steps, he may not legally sell your belongings.  Note also that these steps must be described, in detail, in your storage unit rental agreement, so you should read this agreement.

If you think the owner is in the wrong, you should contact an attorney immediately to remedy the situation.

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Free trial offer no longer free

December 2, 2010 00:20 by Consumer Ed

Dear Consumer Ed:

Last month I signed up for a 30-day free trial for a credit monitoring system. I just got my latest credit card statement and see that the company just charged me a $29.99 fee. When I spoke to them they told me that since I never called to cancel after the free trial, they had automatically renewed my service. I don’t think I should have to pay this bill. What can I do?

Consumer Ed says:

This practice – automatically renewing an agreement unless the customer specifically notifies the company in advance not to renew – is called “negative option billing.” It is a tactic that is being used by more and more businesses, often to the detriment of consumers. Although it is a “legal” practice, there are rules that businesses that engage in this type of billing are required to follow:

  1. Any promotional materials, such as advertisements, sent to you before you contracted with the business must clearly describe billing details, and whether you are automatically re-enrolled after the initial trial period. These materials must also describe how you are to contact the business to cancel your account before the next billing cycle.
  2. After your agreement is in effect, the business must mail you, before any automatic billing, a form notifying you that the agreement will be renewed unless you specifically cancel. The business must also tell you what method you need to use to cancel – i.e. by email, in writing, etc.

You are not bound by the automatic renewal if the business has not complied with these requirements. Therefore, you should go back and read your agreement closely, as well as any promotional materials you received before you entered into the agreement.If you were not appropriately notified of the negative option billing, you should not have to pay the money. You may want to consult with a private attorney to discuss the specifics of your situation.  

Also, note that you do not have to pay for a credit monitoring service in order to review the information contained in your credit file. Under federal law, you are entitled to a free credit report every year, and under Georgia law you are entitled to two free reports. You may want to consider this option instead of paying a company for a similar service. To receive your free reports go to annualcreditreport.com or call 877-322-8228.

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