A report released this week by
the Consumer Federation of America found that car dealers routinely
mark-up car prices through a common bait-and-switch scheme. Car
manufacturer financing departments approve a lower interest rate for
customers, but car dealers get a kickback from manufacturers for
getting the buyer to accept a marked-up interest rate. People of color
are more often victims of the scam. It’s just such deceptive schemes
that California’s Unfair Business Practices Act protects against, but
now car dealers are collecting signatures for a November initiative to
gut the law. The Gov, who has received over $750,000 in campaign
contributions from car dealers, seems poised to help.
Under the car dealers’ initiative, only government entities would be
allowed to bring cases under the Act, not the consumer, environmental
and civil rights groups that currently use the law to stop unfair and
deceptive business practices. Also, cases could no longer be brought to
prevent harm from happening, they could only be filed after some damage
occurred.
A group of so-called "business-oriented" Democrats met with
Schwarzenegger recently in Sacramento to talk about legislative
approaches to gutting the Unfair Business Practices Act. One of the
provisions purportedly discussed is not allowing cases if a regulator
has taken action, even if it’s a slap on the wrist. Given Arnold’s
hostility to regulation, that’s a blank check for this Governor’s
Administration to take a token enforcement action to stop a lawsuit
with far greater consequences.
The car dealers would be very grateful to Arnold for negotiating a deal
on duped car buyers’ rights because they don’t want to spend more money
on a ballot initiative with difficult prospects for success given the
public’s lack of esteem for car salemen. Arnold’s been a pitchman for
the industry before to cut the car tax and boost car sales. The
industry no doubt believes that their proposals (either as legislation
or initiative) will sound better coming from the Governor than a guy in
a cowboy hat on a car lot. But what does it say about the integrity of
a governor who takes three quarters of a million dollars from a special
interest group and kicks back fewer remedies for the public to hold car
dealers accountable in return?
Read the Consumer Federation report on car dealer scams at: http://www.consumerfed.org/autofi-report.pdf
