Inserting False Transaction Dates
One of the more common forms of automobile fraud is backdating vehicle purchase or lease contracts. Although backdating does not violated the California lemon law’s rules, it is still illegal under the California statutes that regulate automobile sales and leases.
How Vehicle Contract Backdating Occurs
Contract backdating typically occurs after a car dealership has canceled an automobile sale or lease contract because it was unable to find a lender that would finance the transaction. The dealer contacts the buyer, tells him or her that they need to come in and sign a new contract if they want to keep the vehicle, and the consumer returns to sign a new contract. Sometime the dealer has the consumer sign a document entitled “Acknowledgment of Rewritten Contract” along with the new vehicle sales or lease contract.
None of this would be illegal or amount to auto fraud if the dealership dates the second automobile sale or lease contract on the date that it is actually signed. However, some dealerships “backdate” the second automobile sale (or lease) contract to the date on which the first contract was signed.
Backdating Automobile Contracts is a Form of Auto Fraud Because it Results in Consumers to Paying Illegal and Unearned Interest
Backdating automobile purchase and lease contracts is illegal because under federal regulations (at Section (b)(2) Appendix J to 12 C.F.R. 226) the car dealership may not charge interest prior to the “consummation” of the transaction, and California law (at California Vehicle Code Section 5901(d)) states a transaction is consummated only after the applicable contract has been signed. Thus, by backdating vehicle purchase or lease contracts the car dealer is charging illegal interest greater than the amount it permitted by law to collect from you.
Call a California Lemon Law Attorney if Your Vehicle’s Purchase or Lease Contract Was Backdated
If you were the victim of contract backdating, then you should call an expert California lemon law lawyer to discuss your legal rights. You may be entitled to “rescind” the contract, which means that you can give the vehicle back and get back all the money that you paid towards it (less a small deduction for the mileage that you put on the vehicle).
The Vachon Law Firm are experts in automobile contract backdating cases. Call (858) 674-4100 right now to find out how much money you may be entitled to based on the dealership’s backdating of your car’s purchase or lease contract. Consultations are always FREE!