The lobbyists in Annapolis don't want it known that a bill before the legislature this year dealing with car sales is really just an attempt to legalize a bait-and-switch scam that has been illegal in Maryland for more than 30 years — and should stay illegal.
Here's how it works: A customer goes to a dealer to buy a car. He picks one out, signs a sales contract with specified financing terms, makes a down payment and offers a trade in. Then he puts insurance on the car, gets tags for it and drives it off the lot. He's told the transaction is a done deal and that is what the contract he signed says.
The customer can't back out, and that's just what the dealer wants — to lock the customer into the sale. But the dealer gives himself the right to back out by having the customer sign a separate, small print document filled with legalese that says the deal the customer thought he had may not be a deal at all.
Weeks, or sometimes even months later, the dealer calls the customer and tells him that to keep the car he has to make a higher down payment, increase his interest rate, get a co-signer, or any number of other conditions that were not part of the original contract.
A customer who balks may be threatened with arrest, his temp tags expire, his trade isn't paid or the car is repossessed. It is no wonder the MVA has been telling dealers for decades that such practices are illegal. Unfortunately the MVA is doing little to go after the dealers, who are now brazenly trying to get the scheme passed into law.
According to a study by the Maryland Consumer Rights Coalition, Maryland families lost more than $240,000 to such scams between 2008 and 2012. And that number is probably low; in 2013, one dealer testified he kept approximately $96,000 a year in car down payments at just two of his showrooms.
The lobbyists are saying this isn't a problem. But the victims deserve at chance to tell lawmakers that what the dealers are doing is wrong.
Jane Santoni, Towson
The writer is an attorney specializing in consumer protection law.