Yo-Yo Financing Tactics

Of the many fraudulent tactics used by unscrupulous used car dealers, yo-yo financing is perhaps the most common and devastating to buyers. Yo-yo financing occurs when a buyer signs a contract, takes the car home, but then is notified weeks later that his or her financing wasn’t actually approved, and the car must be returned to the lot. At this point, buyers are often talked into returning to the dealership and signing a new deal or risk losing their down payment or even facing criminal prosecution and repossession of the vehicle. These tactics, although unfair and unlawful are still used at an alarming rate across the country. Fortunately, used car dealerships can and should be held accountable for this type of conduct, so if you were recently the victim of yo-yo financing or another fraud-based scheme, it is critical to speak with an experienced used car fraud attorney who can help you recoup your losses.

Fraudulent Dealer Tactics

Most car dealerships are not engaged in unlawful activities. However, those that do defraud customers cost their victims thousands of dollars every year. For instance, one of the most commonly utilized schemes is yo-yo financing, which involves using falsehoods to invalidate a previous and valid contract. This could include changing the financing terms of the agreement at the last minute, altering financing data, or providing erroneous information to potential buyers.

Perhaps the most devastating tactic used by dealers is to enter into a contract with a buyer, allow him or her to take the vehicle home, and then contact that individual a few weeks later, claiming that the buyer wasn’t actually approved for financing. Buyers are then instructed to return the vehicle or risk repossession and the loss of their down payment, or are encouraged to enter into a new, and often more expensive contract, just to keep the vehicle.

Unfortunately, it is also not uncommon for dealerships that use these underhanded tactics to tack on extra charges to the price of a vehicle for aftermarket products and services, such as extended warranties, service plans, and guaranteed auto protection, without actually notifying the buyer. In some cases, dealerships even falsely claim that purchasing these services and products is actually required as part of a sale or financing. This type of conduct is also unlawful.

Seeking a Remedy

Once it has been established that a dealership used yo-yo financing tactics, the wronged party can initiate legal proceedings against them. In many cases, this involves litigating the issue in court, while in others, the dealership may be willing to settle with the plaintiff and refund the cost of the vehicle or compensate the buyer for other losses. Plaintiffs who can demonstrate in court that they suffered a financial loss as a result of a dealer’s fraudulent activity could be eligible to collect a full refund for the cost of the vehicle, cancel any outstanding loans, and receive reimbursement of court costs and attorney’s fees.

Contact a Used Car Fraud Attorney

To speak with an experienced used car fraud lawyer about your case, please contact Louis S. Schwartz at CONSUMERLAWPA.com in Philadelphia today. Initial consultations are offered free of charge.

Resources:

nbcnews.com/business/autos/yo-yo-scam-exploits-credit-challenged-car-buyers-f712479

consumer.ftc.gov/blog/2016/09/ftc-auto-dealers-dont-toy-yo-yo-financing

/the-dangers-of-odometer-fraud/