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by the proposed rule whether they are sale of the vehicle in her name using trial court noted that the salesperson
legally enforceable or not. Registrant forged signatures and by participating and the sales manager acknowledged
information and information about their in the wrongful use of her personal the dealership's written policy regarding
use of these terms and conditions would information. She also alleged that the unethical conduct, which specifically
be published in the registry. The public dealership was vicariously liable for the included accepting or writing credit
comment period will remain open for salesperson's and the sales manager's applications known to be false and
60 days following publication of the actions. The grandmother alleged that forging customers' signatures on any
proposed rule on the Bureau's website she suffered damages comprised of documents and explicitly stated that the
or 30 days following publication of the the deficiency owed to the financing dealership could be exposed to liability
proposed rule in the Federal Register, company, tolls, and parking fines. The for the type of conduct engaged in by
whichever period is longer. trial court granted summary judgment the salesperson and the sales manager.
for the grandmother on her CFA claim See De Medeiros v. Brilhante, 2022 N.J.
On January 12, the Office of the against the dealership. The dealership Super. Unpub. LEXIS 2514 (N.J. Super.
Comptroller of the Currency issued appealed, arguing, in part, that it App. Div. December 13, 2022).
a revised "Fair Lending" booklet of could not be vicariously liable for the
the Comptroller's Handbook, which salesperson's and the sales manager's COMPLIANCE TIP
replaces the booklet of the same title actions because their actions were
issued in January 2010. The booklet criminal and thus not within the scope Our Case of the Month discusses
assists OCC examiners in assessing fair of their employment. the extremely important and all-to-
lending risk and evaluating compliance common issue of fraud committed on
with the Fair Housing Act and the The Superior Court of New Jersey, the dealership. In this case, not only
Equal Credit Opportunity Act and its Appellate Division, affirmed the trial did the grandson commit fraud on the
implementing regulation, Regulation B. court's decision. The appellate court dealership, but so too did the salesperson
agreed with the trial court's findings that and sales manager. The actions by the
On January 26, the National Credit the salesperson and the sales manager salesperson and the sales manager were
Union Administration Board approved were acting in those capacities when attributed to the dealership and the
maintaining the current 18 percent they completed the sale and financing dealership was vicariously liable for
interest rate ceiling for loans made transaction with the grandson and that their employees’ actions. What can a
by federal credit unions for a new the grandmother was not present at the dealership do to protect itself? Have
18-month period from March 11, 2023, transaction and did not authorize or a written policy regarding unethical
through September 10, 2024. sign the sales documents. The appellate conduct, including that writing or
court agreed with the trial court's accepting credit applications that are
CASE(S) OF THE MONTH conclusion that the salesperson and the false and forging customers' signatures
sales manager enabled the grandson to on any documents are terminable
Dealership Was Vicariously Liable for complete a fraudulent purchase with offenses. Conduct frequent audits
Employees' Actions in Connection forged documents and, therefore, the of your deals to ensure that no fraud
with Consumer's Fraudulent Purchase salesperson's and the sales manager's occurred in the transaction. Get your
and Financing of Vehicle with Forged conduct constituted an unconscionable sales and F&I employees AFIP certified.
Documents in Violation of New Jersey business practice in violation of the If you find evidence of fraud, you need
Consumer Fraud Act: An individual CFA. The appellate court also agreed to take quick and decisive action. Don’t
went to a dealership and used his with the trial court's conclusion that the let this type of fraud take root in your
grandmother's personal information dealership was liable for its employees' dealership! n
to buy and finance a vehicle without actions because the salesperson and the
her knowledge. The grandmother later sales manager were acting within their Eric (ejohnson@hudco.com) is a Partner
sued her grandson, the dealership, scope of employment when they engaged in the law firm of Hudson Cook, LLP,
the dealership's salesperson, and in the fraudulent conduct. The trial Editor in Chief of CounselorLibrary.com’s
the dealership's sales manager. The court found that the salesperson and the Spot Delivery®, a monthly legal newsletter
salesperson and the manager oversaw sales manager were performing the kind for auto dealers and a contributing
the sales transaction with the grandson. of work they were employed to perform author to the F&I Legal Desk Book. For
The grandmother moved for summary (i.e., effecting the sales of vehicles and information, visit www.counselorlibrary.
judgment on her New Jersey Consumer associated financing) while present com. ©CounselorLibrary.com 2023, all
Fraud Act claim, alleging that the on their employer's premises during rights reserved. Single publication rights
dealership engaged in an unconscionable business hours and for the purpose of only to the Association. HC# 4889-7841-
business practice by transacting the serving their employer. In addition, the 2622.

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