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I have previously posted about how I believe Carfax misleadingly promotes their product. Their recent “Carfox” commercials certainly lead you to believe a clean Carfax report virtually guarantees a good car. It just isn’t so. In fact, here’s what a Carfax Consumer Affairs Analyst said recently in an e-mail about their product:

The reporting of accident events through our service is based primarily on three main aspects:

1) Whether the event in question was reported to any data source capable of collecting electronic records (government agencies, etc.),

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I have a personal story to tell. Recently I had a serious neck injury. I lost much of the use of my right arm because the nerve that controls the deltoid muscle coming from my spinal cord had been pinched where it passes through my cervical vertebrae. The first doctor I saw told me I needed surgery right away. Although I tried to schedule surgery, I was unable to get it scheduled immediately. Meanwhile, I sought a second opinion. I also began to try to educate myself on the medical issue and who were the best doctors in Indianapolis that treat it. The second opinion I obtained agreed that I needed surgery. I was convinced that I needed surgery.

I had heard that Dr. Terry R. Trammell, a doctor at Orthopaedics Indianapolis, was the best. It was difficult to get in to see Dr. Trammell, but I persisted. I am so glad I did. You can probably guess by now that Dr. Trammell told me that I don’t need surgery, at least not right now. Honestly, however, that has nothing to do with why I feel so blessed to have been able to see Dr. Trammell. The awesome thing about him was that he took the time to talk with me and to explain in as much detail as I wanted about my body, the injury, the surgery, what I could expect in the future and what I could and could not do physically and when. He spent about half an hour with me and I learned 100 times more in that half hour than I had in the previous six weeks of dealing with this issue. The doctors before had done virtually nothing to explain the details to me – they just said “you need surgery.” I guess I was just supposed to take their word for it – I’m so glad I didn’t. No one wants to have to undergo surgery unless it is absolutely necessary.

My recovery has been steady since the very beginning. With what Dr. Trammell has told me, I’m now optimistic that it will continue and I will eventually be back to where I was without the need for surgery. We will see. Of course it’s still possible I will need surgery, but even if I do I feel much more comfortable with it now that I have a better idea of what’s going on. Thank you, Dr. Trammell.

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As you may be aware, the so-called Wall Street reform bill has now passed in the House and the Senate. The House version exempts automobile dealers from financial regulatory oversight, while the Senate version does not. I strongly believe that Indiana car dealers need the supervision that could, and hopefully would, come with their inclusion in this law. I recently wrote a letter as part of a successful effort by consumer groups, the U.S. military and others to defeat the Brownback amendment, which would have excluded dealers from the Senate’s version of the bill. Here is the text of that letter:

To whom it may concern:

My name is Robert Duff. I am a consumer law attorney in the State of Indiana. I am writing to express my opinion that the passage of the Brownback amendment would be a huge disservice to the citizens of this state. Here is why I hold this opinion:

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Is a debt collector calling you all the time, to the point that it is harassing and you just don’t want to deal with it anymore? I have a remedy for you, but before I tell you about it I want to point out that I usually recommend to Indiana consumers that they be PROACTIVE in handling their debt. Most of the time, being proactive is the way to go, whether it be by contacting creditors to set up payment plans, contacting a consumer law attorney to defend you against a debt collector (even before the debt collector files a lawsuit against you), hiring a debt payment service to handle the process of paying your debts down or making an appointment with a bankruptcy attorney. The remedy I am about to tell you about is simple, but not very proactive.

The Fair Debt Collection Practices Act, a federal law that regulates debt collectors, states that a debt collector must cease all communication with you if you inform them IN WRITING that you refuse to pay the debt or wish the debt collector to cease further communication with you. The letter to the debt collector can be as simple as: “You contacted me concerning x debt. Please cease all communication with me concerning this debt. Thank you.” If you don’t owe the debt or all that they say you do, tell them that. I highly recommend that you send this notice by certified mail, return receipt requested. The notice is effective as of the date they sign for it. The debt collector can then only contact you to tell you they aren’t going to contact you anymore, to tell you they are going to sue you, or by actually suing you. If the debt collector contacts you by any method and it’s not for one of these three reasons, they have violated the Fair Debt Collection Practices Act. You should contact a consumer law attorney.

I should note that sometimes the debt collector will NEVER END UP SUING YOU after you ask them to cease all communication. Let’s say just for the sake of total speculation that the odds that a lawsuit will be filed, for every debt in the U.S., is 50/50. There are many reasons why no lawsuit is ever filed, but unfortunately it is not possible to predict your prospects for any particular debt. So you are taking a chance that you will eventually be sued, but if you do not intend to pay the debt collector anyway, I am not sure what you have to lose.

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Reliant Capital Solutions is a debt collection agency headquartered in the State of Ohio. They use a lot of different telephone numbers, but some of the numbers they use are: 866-547-5413, 866-738-3181, 866-837-5096, 614-452-6097, 614-328-0518, 614-328-0514, 614-452-6101, and 614-452-6093. I’m sure there are many others. I have a client who has filed a lawsuit against Reliant Capital Solutions alleging, among other things, that a debt collector working for Reliant Capital Solutions left voicemail messages stating and implying that he is with the “Attorney General’s Office” and that a complaint has been filed against my client. The messages neglect to state that the caller is with Reliant Capital Solutions. It is a violation of the Fair Debt Collection Practices Act to falsely state that a complaint has been filed against a consumer, to fail to disclose that a communication is from a debt collector, to make a telephone call without meaningful disclosure of the caller’s identity or to falsely state and/or imply that the caller is with the attorney general’s office.

I believe that collectors working for Reliant Capital Solutions often represent themselves as being with or calling on behalf of the attorney general’s office and use this illegal tactic to intimidate consumers and collect debt. When caught, they claim it was a mistake because they do actually work for the Ohio Attorney General (but should they Mr. Attorney General???). Apparently they do collect student loan debt that is referred to them by the Ohio Attorney General’s Office. However, this does not allow them to state or imply they are with “the Attorney General’s Office” and does not allow them to state they are “representing” or “calling on behalf of” “the Attorney General’s Office” without disclosing that they work for Reliant Capital Solutions, all of which I believe the collectors are doing.

I believe this not only because of my client’s experience, but also because I have uncovered numerous similar complaints to the Better Business Bureau and, ironically, to the Ohio Attorney General’s Office of this same practice by Reliant Capital Services. HAS THIS HAPPENED TO YOU ALSO? If it has, please contact me by telephone (800-817-0461) or by e-mail (robert@robertdufflaw.com). You may be able to help my client show that this a regular practice of Reliant Capital Solutions, and I may be able to help you vindicate your rights under the Fair Debt Collection Practices Act.

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My last blog entry, way too long ago, concerned Carfax and the unreliability of their reports. Well, Carfax has put themselves in the news again and I just couldn’t help but comment. I just read on a local news agency’s internet page that Carfax has put all the Cash for Clunker cars’ vehicle identification numbers (VINs) on its website and has set it up so those VINs can be searched for free. Cash for Clunker cars were supposed to be destroyed, at least the engine and transmission, and of course should not be showing up for sale. Carfax’s apparent press release noted these cars are going to start showing up here and there – a point on which I am in full agreement with Carfax.

The article I read didn’t have a link to it, so I went to the Carfax site. Not surprisingly, I spent about ten minutes searching for it and could not find it. It wouldn’t surprise me if Carfax is making it intentionally difficult to access so that frustrated consumers will just decide to buy a regular Carfax report on the car. I could be wrong. Maybe the website is set up so that no reports are sold on Cash for Clunker vehicles but instead when a person tries to buy a report on such a car a huge warning pops up. I hope so. But knowing what I know about Carfax, I have my suspicions.

Anyway, I found the link in another news article. The free search can be conducted here.

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I was working today on one of my car dealership fraud cases when I came across a Carfax Vehicle History Report. Having seen Carfax’s recent television commercials, some of which are pretty funny (check this one out: Carfax Commercial), I thought another brief blog entry might be in order because I’m really bothered by how unreliable I have found Carfax reports to be. Now, I’m not saying they’re useless. In fact, I have recommended to family and friends that they purchase both a Carfax and Autocheck report on any vehicle they are considering purchasing. The primary reason is to see if anything shows up. If it does, I have found that it tends to be accurate. But if nothing shows up, it really doesn’t mean much. Carfax reports are very often incomplete and really shouldn’t give you the peace of mind the Carfax commericals imply you should receive from their report (“Get the truth about used cars.”). Sadly, some dealers love to find a car that sells for less at auction because of a defect but has a clean Carfax report (which the dealer will use to sell the vehicle to a consumer for more profit without disclosing the defect) .

Here is what Carfax says about the reliability of its report: “CARFAX DEPENDS ON ITS SOURCES FOR THE ACCURACY AND RELIABILITY OF ITS INFORMATION. THEREFORE, NO RESPONSIBILITY IS ASSUMED BY CARFAX OR ITS AGENTS FOR ERRORS OR OMISSIONS IN THIS REPORT. CARFAX FURTHER EXPRESSLY DISCLAIMS ALL WARRANTIES…”

Be warned: obtaining a Carfax report is not the end of your investigation into the purchase of a used car, but the beginning.

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I want to mention a couple decisions from the Indiana Court of Appeals that will likely have a profound impact on Indiana consumers for years. The decisions are noteworthy because they are both a significant departure from and/or addition to prior Indiana law and they make it much easier for credit card companies and debt collectors to obtain judgments against Indiana consumers. Do I believe the cases were wrongly decided? Yes I do. But I also believe that part of the problem is that the consumer/defendants tried to represent themselves in these cases.

I don’t mean to say that these consumers meant to do anything wrong. In fact, I feel for them. I know that sometimes there is simply no money to hire an attorney and no way to come up with the money. I understand that. I also know that it can be difficult to find an attorney who knows how to handle debt defense cases and who won’t charge an outrageous fee for doing so. I have clients tell me this often. Nevertheless, the fact remains that we have these two Court of Appeals decisions that are potentially harmful to every Indiana consumer in debt because these consumers decided to defend themselves, lost in the trial court and then made the very unfortunate decision to appeal. And if the Court of Appeals opinions are to be believed, neither did a good job of defending their own interests or the interests of Indiana consumers.

One of the cases deals with arbitration. It makes it very difficult for Indiana consumers to challenge an arbitration award. First, and this is critically important, the challenge must be filed within three months after the award is “filed or delivered.” What “filed or delivered” means apparently will depend on the rules of the entity agreed-upon (allegedly) to conduct the arbitration. In this particular case, it was the mailing of the award by U.S. Mail. Proof of receipt of the mailing is not required. This means that, as the consumer alleged in his case, the time to challenge the arbitration award could expire before the consumer has any idea that an arbitration was ever filed! If that happens, under this decision, the consumer is simply out of luck.

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It may be too late for many Indiana consumers, but it’s still noteworthy. Congress just passed legislation that will shortly be signed by the President that cracks down on some of the abusive practices long used by the credit card industry. Although the law won’t go into effect for nine months, the bill will generally bar interest rate increases on existing balances unless a cardholder has failed to make even a minimum payment for 60 days, require 45 days’ notice before any interest rate increase, and prohibit increases any time in the first year after an account is activated. The legislation would also require card companies to apply a consumer’s monthly payment to the debt with the highest interest rate, or to all debts equally.

It doesn’t go far enough, but it’s a good first start. And, perhaps more important than the details of the law, is the fact that the tide has turned and the credit card companies know it. Will it result in a restriction of credit? Sure. But I don’t think that’s a bad thing. I think it is a very good thing.

Credit must be given where credit is due (pun intended). This legislation clearly was spearheaded and made possible by President Obama. “I’ve been in Washington 20 years,” said Ed Mierzwinski, the consumer program director with the U.S. Public Interest Research Group. “For the first 19, we couldn’t even get a committee vote on credit card reform despite these practices.” I am excited and optimistic about the benefits I hope consumers will reap under the Obama administration.

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I would like to take a second to highlight a case recently decided by the Indiana Court of Appeals. It is important not because it made new law but simply because it is a good reminder of what the law is.

The case is captioned Brad Lawson v. Rodney Hale d/b/a R.H. Equipment. It was decided on February 26, 2009. Brad Lawson bought a used tractor from R.H. Equipment. At the time of purchase, Mr. Lawson inquired whether there were any problems with the tractor. Hale did not disclose any problems, despite the fact that he knew the engine had a cracked block that had been ineffectively repaired.

The case was tried to the Court without a jury and the judge found for the defendant. The Court of Appeals reversed and directed the trial court to enter judgment for the Plaintiff on the fraud claim, citing it as a “textbook case” of fraud. The lesson we are reminded of is summarized in two important sentences from the opinion: “[F]raud is not limited only to affirmative representations; the failure to disclose all material facts can also constitute actionable fraud. When a buyer makes inquiries about the condition, qualities or characteristics of property ‘it becomes incumbent upon the seller to fully declare any and all problems associated with the subject of the inquiry.”

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