In 1982, California became the first state to pass an automobile “lemon law” which gave owners of defective cars the opportunity to seek a replacement or a refund for a new car that had a defect that could not be repaired in a reasonable amount of time. This law proved so popular that other states soon followed suit. Less than twenty five years later, all fifty states have some sort of lemon law on their books. California may take the lead again in the protection of auto buyers as the state Assembly recently passed a “bill of rights” designed to protect buyers of used cars.
This bill, which has not been signed into law, would protect buyers of used cars from deceptive lending practices, sales of lemon-law buyback vehicles, and vehicles with frame damage. Buyers would also be allowed three days in which to cancel the deal if they changed their mind after the purchase.
This bill may or may not become law, but it outlines the need for laws that cover sales of used cars as well as new ones. While all states have a lemon law that covers the sale of defective new vehicles, few states have laws that protect buyers of used vehicles. As a result, many buyers have become victims of deceptive practices such as rolling back a vehicle’s odometer to show fewer miles, reselling cars that have previously been bought back by manufacturers as lemons and selling wrecked cars that have been repaired without noting their accident history. In addition, many used car dealers sell cars using deceptive financing terms that can add hundreds or thousands of dollars to the cost of the vehicle, often without the buyer’s knowledge.
If this bill does become law in California, expect other states to follow, just as they did with lemon laws. Consumer protection benefits everyone, and laws protecting buyers of used cars are just around the corner.
Home Loans – Identity Theft Protection Could Hurt Home Sales
Identity theft has been a hot topic in the news during the last few years. Just a month or so ago, forty million credit card numbers were compromised due to a computer attack on a credit card processor. Consumers are rightly concerned, as it can take years to unravel the problems created when someone’s identity is stolen. New legislation in Texas and California, also proposed elsewhere, is designed to protect consumers by letting them put a “freeze” on their credit reports. Those in the real estate industry are worried, however, that doing so may make it difficult for some people to buy homes.
Debt Consolidation – How to Protect Your Credit Accounts from Theft
Last week, a security exploit at CardSystems Solutions, Inc, a credit card processor, may have allowed thieves to obtain as many as 40 million credit card numbers from unsuspecting victims. The theft was brought about though a virus introduced into the CardSystems that allowed external hackers to obtain access to the account information. Adding to the problem was the fact that CardSystems wasn’t supposed to have the account information at all. It appears that CardSystems “inappropriately” held onto the information after clearing the credit card transactions. At that point, the account information should have been deleted. CardSystems held onto the account information for supposed “research purposes.” Fortunately for those involved, the compromised information only included account numbers and not Social Security numbers, which would have assisted the thieves in identity theft scams. This latest security breach at a credit card processor outlines how anyone can be vulnerable to account or even identity theft. Is there anything that can be done about it?
New Bankruptcy Law – Targeting the Wrong People?
Last April, President Bush enthusiastically signed into law the oddly-named Bankruptcy Abuse and Consumer Protection Act. This bill, representing the biggest overhaul of bankruptcy law in twenty-five years, was written in order to discourage “bankruptcy of convenience.” Proponents of the bill, which included the credit card industry, say that the bill is necessary in order to stop an avalanche of bankruptcy filings by drug users and compulsive shoppers and gamblers. The law makes it harder to have debts wiped away, requires credit counseling for those considering bankruptcy, and holds attorneys responsible for paperwork errors by their clients in bankruptcy cases. The net result will probably be chaos, as fewer attorneys will handle bankruptcy cases, credit counselors will raise their fees, and more consumers with problem debt will be clueless as to what they should do next. Adding to the confusion are some new statistics that suggest that a large number of bankruptcies that are thought to be personal are actually business bankruptcies. As a result, the new law may be unfairly targeting consumers for punishment when they are not actually the biggest part of the problem. Worse, it could be harming small businesses.
