What to do if your car has missing airbags

Minneapolis auto fraud lawyers

Pamela Carls – flickr.com

As we discussed in an earlier post, car dealers sometimes sell a formerly wrecked car without disclosing to the buyer that it’s been in a serious accident. Maybe the most shocking is where the dealer repairs the car, but doesn’t replace the airbags (and of course, doesn’t tell the unsuspecting buyer.) In some cases, the airbag compartment has been found filled with packing peanuts or paper towels. Airbags cost $1,000 to $3,000 to replace, and so if the dealer buys the car at auction, fails to make the repair, and doesn’t tell anyone, that’s $1,000 to $3,000 of pure, dirty profit to them. Here are a few steps you can take to detect whether your airbags are missing:

1. Check the airbag compartment. Is there physical damage to any of the airbag compartments? Tears or scratches in the dashboard could be indicators that the airbags have previously been deployed.

2. Pay attention to the dashboard lights. When you start the car, the airbag light should go on for a few seconds, and then turn off. If they don’t turn off, you might have an airbag problem. But also be conscious if they never go on to begin with. This could mean that the indicator light has been covered up or disconnected to hide the fact that the airbag is missing.

3. Take it to a mechanic. If you have some suspicion that the airbag is missing, a good mechanic might be able to tell, at the very least, that the car was in a serious accident. They might also be able to check whether the wiring on the airbag indicator has been tampered with.

4. Order a summary report. You can order a CarFax or AutoCheck report to see if the car has been in an accident. These summary reports are hardly perfect, and often don’t show when accident damage has been sustained to a car, but they can be a starting point.

If your car has no airbags, we can help. Get in touch for a free consultation.




How to know your car is a rebuilt wreck

Minneapolis auto fraud

Photo by Bradley Olin – flickr.com

Shady car dealers like to find ways to sell bad cars for as much money as possible. A really opportunistic dealer may sell a frame-damaged car with shoddy repairs, not disclosing that the car has serious structural issues. Once a car has sustained serious frame damage, it will often never again be safe to drive, unless very careful and expensive repairs are completed. The safety issues involved in rebuilt wrecks can be severe and possibly life-threatening.

Search the history. One of the ways to find out whether a car is a rebuilt wreck is to search its history. Summary history reports like Carfax and AutoCheck may tell part of the story, so they can be a good first place to look. You might also pull a title history on the car, to see if an insurance company ever owned it, or if it ever had a salvage title. You can pull a title history by contacting the state motor vehicles department in every state the car has been titled.

Look for physical warning signs. In a 2002 article, Consumer Reports listed a few indicators that your shiny car may be a beater underneath. Frame damage is not always hard to spot if you know what to look for. You can also tell by taking your car to a reputable body shop, telling them that you suspect there’s damage, and seeing what they say.

Consumer Reports–Warning signs that a used car is really a rebuilt wreck:

  1. Paint that chips or doesn’t match indicates damage repair and poor blending.
  2. Door that doesn’t close correctly could point to a door-frame deformation and poor repair.
  3. Hood or trunk that doesn’t close squarely may indicate twisting from side impact.
  4. Fresh undercoating on wheel wells, chassis, or engine strongly suggests recent structural repairs covered up.
  5. Paint overspray on chrome, trim, or rubber seals around body openings reveals that the adjacent panel was repaired.
  6. Misaligned fenders suggest a poor repair job or use of nonoriginal equipment manufacturer (non-OEM) parts.
  7. CAPA (Certified Automotive Parts Association) sticker on any part may indicate collision repair.
  8. Uneven tread wear reveals wheel misalignment, possibly because of frame damage.
  9. Mold or air freshener cover-up suggests water damage from a leak or flood.
  10. Silt in trunk may mean flood damage.

We’ve seen things even more blatant, such as zip ties holding parts together, or crude putty jobs patching up physical damage.

We’re Minneapolis auto fraud lawyers, and can help with a rebuilt wreck. Whether the dealer has outright lied, i.e. “this car is spotless,” or just hid the fact that the car has sustained frame damage in an accident, you may have a legal claim. And often, the dealer has to pay your attorneys’ fees when you win. If you think you have a rebuilt wreck, get in touch.

Lemon law: What to do if your car is defective

We discussed Minnesota’s lemon law in a previous post. If you think you might have a lemon, we have a few tips that might make it easier to win your case, if you’re not able to resolve your issue out of court.

1. Read your owner’s manual. You want to make sure you’re maintaining your car properly. When you bring your lemon law case, the manufacturer might accuse you of failing to maintain your vehicle properly, and argue that the problem is your fault. If you’ve kept up with the scheduled maintenance (and you can prove it) and you haven’t abused the car, you shouldn’t have any problems. If you can’t find your owner’s manual, you might be able to get an online copy.

2. Document the car’s problem on your own. The dealership/manufacturer will try to argue that there’s no problem with the car, or that the problem doesn’t affect the car’s performance. Keep your own proof of the car’s defect. Your phone’s video camera can be your best friend here. When the problem happens, make sure the camera’s running. Show the video to the service department at the dealership so that they know exactly what the problem is.

3. Keep copies of all repair orders and communications with the dealership/manufacturer. You want to have proof that the dealership tried, and failed to repair your car. Keep all the repair orders, and make sure they’re correct. Make sure they state that they tried to fix the problem. Even more importantly, make sure the repair orders show the correct dates the car was brought into the shop and given back to you. If your car has been in the shop for more than 30 days, you don’t want repair orders that say the car was only there for a week.

Most of all, when you think you have a lemon, get in touch with a lawyer immediately. We can help make sure the dealer isn’t pulling any tricks on you. We offer free consultations.

What is the Minnesota Lemon Law?

Friedman Iverson - Minnesota lemon law

Photo by Rob Bertholf – flickr.com

Minnesota’s lemon law protects you against a new car (sold with a written warranty) that has a problem that affects the use or value of the vehicle. Under the lemon law, for any problem that arises within two years of purchase,  the manufacturer must replace or a refund a vehicle if a serious problem can’t be fixed within a “reasonable” number of attempts.

Minnesota lemon law presumption

In order to use the lemon law, the manufacturer must have made a reasonable number of attempts to repair the vehicle. You don’t have to meet the lemon law presumption to have a case, but it sure helps. The presumption means that a particular number of attempts will be assumed to be reasonable.

  • - Four attempts to repair the same problem;
  • - One attempt to repair a defect involving the complete failure of the steering or braking system;
  • - The car has been out of service for 30 or more total days.

Filing a lemon law case

If you think you have a case, get in touch with an attorney. We offer free consultations. If you win, the manufacturer must refund or replace the vehicle, plus it will pay your attorney’s fees.

I forgot to add a creditor to my bankruptcy

As hard as we try to find all of your creditors before a bankruptcy, every once in a while one slips through the cracks. What happens when a creditor gets left out?

1. First of all, don’t get any ideas. All creditors are “included” in bankruptcy. You can’t leave one out, purposely or accidentally. So there’s no point in “forgetting” to list a creditor, for example, in hopes that you can keep a credit card open. And remember, you sign your bankruptcy under penalty of perjury, so it’s illegal to leave any information out of your bankruptcy papers. And as your attorney, I know better and won’t let it happen. So don’t try.

2. In a no-asset Chapter 7 case, all debts are discharged whether listed or not. If a debt is dischargeable, then it’s wiped out in a typical Chapter 7 bankruptcy whether it’s listed or not (as long as it wasn’t left out intentionally.) Typically when a creditor has come out of the woodwork after a Chapter 7, we just send them a letter notifying the of the bankruptcy, and that’s enough to protect you. After that, any attempts to collect the debt would be illegal.

3. In a Chapter 7 cases with assets, debts may not be discharged unless listed. Unlike a no-asset case, in which a creditor generally has nothing to gain from being listed in the bankruptcy, in a case where assets are going to be distributed to creditors, it does harm the creditor to be unlisted. Section 523(a)(3) of the Bankruptcy Code makes a debt like this non-dischargeable if it wasn’t listed in the bankruptcy.

4. In a Chapter 13 case, a creditor must at least be added before the case is finished. In a Chapter 13 case, a creditor must have been listed in the plan to be discharged.  So if you’ve forgotten to add a creditor, and you’re already in your Chapter 13 plan, it’s probably wise to go back and add the creditor. This is probably fixable, since Section 523(a)(3) doesn’t apply to Chapter 13.

If you’ve left out a creditor and need help, get in touch. Or you can read more about bankruptcy.

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How to deal with an odometer rollback

odometer fraud

A prime candidate for a rollback.

In the post we describe how we can get you triple legal damages, with a minimum of $10,000, and your attorney’s fees paid for, when your odometer has been rolled back.

Shady car dealers love to find a way to make an extra buck on a used car. One way they do this is by rolling back the odometer. WIth digital odometer displays, it is often very easy for a car dealer to roll back an odometer. We sue car dealers for odometer fraud and can get significant legal damages. Here’s how you deal with odometer fraud:

1. Why scammers roll back the odometer. Easy–rolling back the odometer lets a dealer sell a heavily-worn car for newer-car prices. I drive a 2007 Honda Fit Sport. With 50,000 miles a car like mine might sell for $9,676. With 150,000 miles it sells for $5,067. An unscrupulous car dealer might see that $4,600 as easy money.

2. How to spot odometer fraud. Here are a few tips for finding a rolled-back odometer, either before or after the sale.

  • - Pull a vehicle history report such as a Carfax and AutoCheck. Sometimes these don’t show rollbacks, so just because a CarFax comes up clean doesn’t mean the odometer is too.
  • - Ask the seller for maintenance records. Even oil change records almost always mark down the mileage.
  • - Look in the owner’s manual or on service stickers inside the door or under the hood. Did the car dealer leave behind damning evidence?
  • - Look for damage to the instrument panel. There may also be fingerprints inside the glass. This is a great sign of odometer tampering.
  • - Is the brake pedal worn? Tires? Take the car to mechanic to see if they can find evidence that the car is more used than it appears.

3. The Federal Odometer Act may protect you. The Federal Odometer Act is a very powerful law that punishes the perpetrators of odometer fraud. Any dealer who rolls back an odometer, or sells a car knowing the odometer has been rolled back, may be liable for triple your money damages, with a minimum of $10,000. Plus they have to pay your attorney’s fees if you win.

We’re Minneapolis auto fraud lawyers. We handle odometer fraud cases. Get in touch if you think you’ve been a victim.

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Photo: http://www.flickr.com/photos/nicholas_t/6963327133/

Common FDCPA violations in student loan collections

The total amount of federal student loan debt in the U.S. is about one trillion dollars. When a borrower falls behind on payments, the collection process begins. Although federal student loan collectors have impressive collection powers, it’s important for consumers to recognize that the Fair Debt Collection Practices Act still prevents a debt collector from making false or misleading statements or otherwise harassing or abusing a consumer. Here are some of the most frequent FDCPA violations in student loan collections:

Misleading threats to garnish wages. Debt collectors often mislead or lie to consumers about the imminence of a wage garnishment if the consumer doesn’t pay immediately. A federal student loan collector may institute an administrative wage garnishment against a consumer who is delinquent. No judgment is required. But there are important steps that a collector must follow before starting an administrative wage garnishment. They must send the consumer a notice–at least 30 days before starting the garnishment–that advises the consumer of their right to inspect the records related to the debt, their right to a written repayment agreement, and their right to a hearing. The consumer then has 15 days to request a hearing. And a private student loan collector doesn’t have the ability to do an administrative wage garnishment. They have to sue the consumer and get a court judgment first. So, a collector can’t just start a wage garnishment immediately if the consumer doesn’t pay and any threats to the contrary probably violate the FDCPA.

Lies about how to get a federal student loan out of default. Debt collectors often lie to or mislead consumers about the ability to get a federal student loan out of default. A federal student loan is considered to be in “default” if the borrower goes 270 days without making a payment. Once the loan is in default, a 25% collection fee may be tacked on. But a borrower can get a federal student loan out of default by “rehabilitating” the loan. This means making nine voluntary, reasonable, and affordable monthly payments within 20 days of the due date during ten consecutive months. A borrower may also be able to get the loans out of default by consolidating into a single loan. Debt collectors often tell consumers that there’s nothing they can do to get the loan out of default, or don’t tell them about all of their options, which may violate the FDCPA.

Telling consumers that they can’t discharge student loans in bankruptcy. Student loan collectors often tell consumers that student loans can’t be discharged in bankruptcy. While this is often true, it isn’t always true. A borrower may be able to get a student loan discharged if they can prove undue hardship. The burden of proving undue hardship is very difficult, but it can, and has, been done. A debt collector that tells you that student loans can never be eliminated in bankruptcy isn’t telling the truth and is likely violating the FDCPA.

Illegal contacts with third parties. Under the FDCPA, a student loan collector (or any collector) can’t communicate with your family members, co-workers, friends, or other third parties. Even threats to do so probably violate the FDCPA.

The bottom line. If a student loan collector chooses to give a consumer legal advice, they better get it right. Making false statements about the law or a consumer’s options probably violates the FDCPA.

To learn more about the FDCPA, subscribe to our email list.

Turning the tables

I recently sued a debt collection agency and one of its collectors for violating the FDCPA. The collector made some illegal threats to my client. The threats weren’t the worst I’ve ever heard of, but my client was dealing with some other things in his life and was pretty shaken up by them.

Right after they were served with our FDCPA suit, I got a call from the individual collector I had sued. He must have been really nervous during the call because he kept fumbling over his words and repeating himself. His voice faltered a few times. He told me that this was the first time that the agency had been sued and that they wanted to do the right thing and take care of the FDCPA lawsuit. He said that they were a small agency with only four employees, that their cash flow was tight, and that they were having a hard time making payroll. He made a settlement offer that was significantly lower than what I would typically settle the case for and asked if I would allow them to split the settlement amount into smaller monthly payments. He said that was really the best that they could do under the circumstances and that anything more would put them in a big financial bind. Based on my research of this agency, I believe that what he was telling me was largely true. There’s no doubt in my mind that he was genuinely shaken up by getting sued. I felt bad for him.

I don’t usually take any personal satisfaction in suing a debt collector. I really don’t. But this situation was different. Although the irony was probably lost on the collector, I recognized it immediately. He finally experienced how a consumer feels when she gets sued by a debt collector. He experienced the shock of being served with a lawsuit and felt the stress of having to figure out how to pay on a tight budget. He worried about how the lawsuit would affect his ability to keep the company afloat. He begged me to be reasonable and accept a lower amount than I would normally take. I just hope he remembers how scared he felt the next time he is tempted to bully a consumer into paying a debt that she can’t afford to pay.

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FDCPA amendment could roll back consumer rights

Last week, a bill was introduced in the U.S. House of Representatives that proposes to amend the Fair Debt Collection Practices Act. If passed, the bill will exempt attorneys from the FDCPA if they are: “serving, filing, or conveying formal legal pleadings, discovery requests, or other documents pursuant to the applicable rules of civil procedure” or “communicating in, or at the direction of, a court of law or in depositions or settlement conferences, in connection with a pending legal action to collect a debt on behalf of a client.” In other words, the bill would provide a safe-harbor from the FDCPA for attorneys engaged in litigation. The text of the bill can be found here.

InsideArm.com, a collection industry website, portrays the proposed bill as a technical amendment to the FDCPA that won’t affect a consumer’s rights. I disagree. According to the U.S. Supreme Court in Heintz v. Jenkins, 514 U.S. 291, 115 S.Ct. 1489 (1995), the FDCPA applies to debt collection attorneys who regularly engage in consumer-debt-collection activity, even when that activity consists of litigation. And several circuit courts have either expressly held or implied that false statements made in litigation can be actionable under the FDCPA.

For example, in Hemmingsen v. Messerli & Kramer, P.A., 674 F.3d 814 (8th Cir. 2012), the court held false statements made in litigation–even if not made directly to the consumer–could violate the FDCPA. Similarly,  in Sayyed v. Wolpoff & Abramson, 485 F.3d 226 (4th Cir. 2007), a case involving false statements made in legal documents, the 4th Circuit held that the FDCPA applied to such litigation activity. The Sixth Circuit implied the same thing in Miller v. Javitch, Block & Rathbone, 561 F.3d 588 (6th Cir. 2009).

The Fourth, Sixth, and Eighth Circuits encompass 16 states and are the supreme law in those states unless the U.S. Supreme Court says otherwise. So to argue that the proposed FDCPA amendments don’t affect existing consumer rights is false, at least in the 16 states in the 4th, 6th, and 8th circuits. What the bill actually does, then, is give collection attorneys a free pass under the FDCPA to lie to consumers, judges, and court personnel as long as those lies occur in the course of litigation.

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Same-sex married couples can file bankruptcy together

We wrote about the evolving status of same-sex couples in bankruptcy here and here. Now that the Supreme Court has struck down the Defense of Marriage Act, the federal government must recognize same-sex marriages valid in the state in which they were performed. Although this specific issue hasn’t come to bankruptcy court, it’s clear that the bankruptcy system will have to follow the Supreme Court’s ruling and allow same-sex married couples to file joint bankruptcy cases.

1. Anyone legally married in Minnesota can file bankruptcy together in Minnesota. Any married couple can file a joint bankruptcy case if their bankruptcy was legally performed in Minnesota. This includes same-sex couples whose weddings were performed on or after August 1, 2013.

2. Anyone legally married in another state can file bankruptcy together in Minnesota. Any couple married in Iowa, New York, or any of the other 11 states allowing same-sex marriage can file a joint bankruptcy. It’s not clear how a Canadian marriage, for example, would shake out in U.S. bankruptcy court, but I’m sure this is something we’ll learn soon.

3. Anyone who’s legally married in any of these states can file bankruptcy together anywhere in the U.S. The full faith and credit clause of the Constitution basically says that a public act (such as marriage) valid in one state is also valid in any other state. This means that any same-sex couple married in any of the 13 states allowing same-sex marriage can file a joint bankruptcy anywhere in the U.S.

4. Filing a joint bankruptcy has benefits. Most attorneys will price a joint case lower than two individual cases. Instead of paying two attorney’s fees, a same-sex married couple can now pay one. The same thing goes with for the court’s filing fee. Plus it’s much easier to provide an attorney one set of information, rather than having to handle each case separately. This is a BIG deal.

Have questions about same-sex marriage and bankruptcy? Give us a call.

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