Page 12 - MIADA-Q3 2023

The CARLAWYER ©

By Eric Johnson, Partner in the law firm of Hudson Cook, LLP, Editor in Chief of CounselorLibrary.com’s Spot Delivery®

and (5) wrongfully repossessed buyers’ circumstances, to design and implement
vehicles. The CFPB is seeking, among other special purpose credit programs to extend
things, redress to consumers, civil money credit to persons who would otherwise be
penalties, and an injunction to prevent denied credit or would receive it on less
future violations. favorable terms. The agencies’ roundtable
event is open to the public via livestream.
FCC Imposes Record-Breaking Fine
Against International Network of CASE(S) OF THE MONTH
Robocallers. On August 3, the FCC
imposed a record-breaking fine of Dealership Violated California’s
Here’s our monthly article on selected legal approximately $300 million against an Automobile Sales Finance Act by Failing
developments we think might interest international network of companies that to Indicate that Portion of Downpayment

the auto sales, finance, and leasing world. made illegal robocalls to consumers in Would be Paid in Installments After Date
This month, the developments involve the order to sell purported “auto warranties.” of Purchase: An individual bought a used
Consumer Financial Protection Bureau, The companies allegedly made over 5 vehicle from a dealership on June 22, 2019.
Federal Communications Commission, billion robocalls to more than 500 million The parties agreed that the buyer would pay
Federal Reserve Board, Federal Deposit phone numbers during a 3-month span in a $2,000 downpayment—$1,000 on the date
Insurance Commission, Federal Trade 2021 that allegedly were placed without of purchase and then another $1,000 in three
Commission, other federal agencies. As prior express consent, included numbers installments drawn from his bank account:
usual, our article features the “Case(s) of the on the National Do Not Call Registry, failed $333 on July 8, 2019, $333 on July 20, 2019,
Month” and our “Compliance Tip.” Note to identify the caller, failed to provide a call- and $334 on August 5, 2019. The buyer’s

that this column does not offer legal advice. back number that allowed consumers to monthly payments would begin on August
Always check with your lawyer to learn how opt out of future calls, and used misleading 6, 2019. However, the retail installment sale
what we report might apply to you or if you caller identification. contract stated that the buyer paid a $2,000
have questions. downpayment in “Cash, Cash Equivalent,
FTC Updates National Do Not Call Check, Credit Card, or Debit Card” on
FEDERAL DEVELOPMENTS Registry Access Fees. On August 17, the the date of sale and that he would pay no
FTC issued a final rule to update the fees “[d]eferred [d]ownpayment[s].” After the
CFPB Sues Servicer for Wrongfully charged to entities accessing the National purchase, the dealership assigned the RISC
Disabling and Repossessing Vehicles, Do Not Call Registry, effective October to a finance company. The buyer later sued
Failing to Ensure GAP Refunds, Double- 1, 2023. The first five area codes are free, the dealership, its surety, and the finance
Billing for Insurance, and Wrongfully and exempt organizations may obtain the company, alleging, among other claims,
Applying Payments. On August 2, the entire list for free. The cost of accessing a violations of California’s Automobile Sales
CFPB sued a servicer of auto financing single area code will increase by $3 to $78. Finance Act. The trial court concluded that
contracts originated by a buy-here, pay- The maximum charge to any single entity the dealership violated ASFA, ordered the
here dealership affiliate. The CFPB alleged for accessing all area codes nationwide will buyer to return the car, and awarded him
that the servicer: (1) wrongfully disabled increase by $662 to $21,402. The fee for $15,995.50, the amount he paid for the
buyers’ vehicles using starter-interrupt accessing an additional area code for a half vehicle.
devices when the buyer was not in default year will increase by $1 to $39.
or was in communication with the servicer The Court of Appeal of California affirmed
about upcoming payments; (2) failed Agencies to Hold Roundtable Discussion the trial court’s decision. Under Section
to ensure refunds of guaranteed asset on Special Purpose Credit Programs. The 2982(a)(6) of ASFA, dealers are required
protection insurance premiums when CFPB, OCC, HUD, and FHFA will hold to disclose all the terms of a conditional
buyers were entitled to a refund because a roundtable discussion on September sale contract in a single document. Among
they paid off their financing early or their 12 with representatives from community other things, the single document “must
car was repossessed; (3) double-billed groups and industry trade organizations itemize the purchaser’s downpayment.” The
buyers for collateral protection insurance; on the availability and benefits of special itemization must state: (1) the agreed value
(4) wrongfully applied buyers’ payments purpose credit programs. The Equal Credit of the property being traded in; (2) the
first to late fees or collateral protection Opportunity Act and its implementing prior credit or lease balance, if any, owing
insurance instead of accrued interest; Regulation B permit creditors, under certain on the property being traded in; (3) the net

12 | MSIADA MISSISSIPPI DEALER Q3 2023