Double Collecting Is Consumer Fraud

Buying a car even if you haggle down the price will still cost you more than it should with this scam.

Ever bought a car and thought you got a really great deal – until you added up the costs later? Beware of a very common scam car dealerships use to make extra cash from their customers; often as much as between $500 to $2,500. The amount you pay out toward the scam is largely dependent on what you are willing to spend. The really annoying and underhanded part of this consumer fraud scheme is that the money you get asked for later is money the dealerships recover from the factory. Put another way, you are being overcharged for something the dealership ultimately gets back.

Here is how this scheme works. You have haggled the price of your car down to what you are willing to pay. So far, so good. Then, you get hit with the line that the dealership is trying to recover their losses when they discount the manufacturer’s suggested retail price (MSRP). So, they attempt to tack that on to the price you have already agreed to pay. Many people do pay the extra $500 (or more) in something called “pre-delivery service fees.” This is a scam, because it’s these fees that the dealership can recover from the factory later.

Here is what the “prep” fees are supposed to cover: taking the plastic off the seats (not a terribly hard endeavor), double checking fluid levels, taking a vacuum cleaner to the interior and washing and waxing the exterior. All in all, that may take about 2 hours or so. If the dealer tells you that you have to pay for it, stick to your guns and say no, because this service is already included in the MSRP. If you “do” pay for it, the dealership has just pulled off the double collecting scam.

Surprisingly enough, this practice is fairly widespread, largely because consumers are not that well informed about how to buy a car and what fees are involved. What happens if your refuse to pay the prep fee? The best way to handle this situation is to just tell the dealership to credit you the amount of the prep fees on your contract. Many dealers will refuse, and that’s fine, as your next move is to walk out. You won’t be losing anything at that point.

Is this double collecting scam legal? Unfortunately, yes, it is legal for a car dealer to pad the prep fees on your final bill. However, if you “know” before you go that the prep fees are already included in the MSRP, you can save yourself anywhere from $500 to $2,500. If you have been a victim of this scam, report them to the Better Business Bureau and get the complaint on record. You may save someone else the hassle of being double billed for no good reason other than greed.

Ty Gomez writes for the Gomez Law Group, a Dallas employment lawyer and Dallas business lawyer. To learn more, visit Gomezlawyers.com.

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Escrow Closing Fee Kickback Frauds Common

If you’re buying a home, make sure you are well informed about closing fees to avoid fraud.

For those of you who are considering buying a home, there are a lot of expenses involved and you need to know about them so you don’t get any nasty surprises later. Unfortunately, there is something else you should know as well and that is about closing fees kickback fraud. This is far more common than you might think, so make sure you are well informed about every financial detail you need to deal with during closing. If you have questions, then contact a Dallas business lawyer.

While federal investigators have put a crimp in several underhanded closing fees kickback rings, these scams/frauds are still rampant in the industry. Unfortunately, kickback fees are really simple for a less than honest real estate agent to pull over on an unsuspecting buyer. Try and avoid situations like that by being an informed buyer.

One way to pull off closing fee kickback fraud is to have a real estate agent set up a corporation that buys an interest in an escrow and title insurance company. Then, a group of rip-off artist home builders set up the same type of corporation and also have an interest in the escrow company. What happens next is the real estate agent and the home builders then refer their clients to their “own” title companies. The title company then pays a finder’s fee/kickback from a percentage of the title and settlement fees to the agent and builder. Slick as heck, not to mention unethical, immoral and illegal.

Padding closing fees is another area you need to be careful of when buying a house as well. Title companies, once they’ve already pulled off their kickback scheme, also tend to seriously pad closing fees. This type of fraud has the full attention of the Department of Housing and Urban Development (HUD). In fact, the department actually has a unit dedicated to real estate settlement oversight – a polite way to say scam/fraud.

Be on the lookout for failure to reveal the true settlement costs, if you get told at all. You need a HUD-1 before closing. If you don’t get it, watch out. You also need to be cautious about companies underestimating settlement costs. They could be doing this intentionally to deceive you. This is like bait and switch at some huge retail shops; you get attracted by a low upfront price which suddenly escalates once you are a customer.

There are many other things you need to be aware of when buying a house, including jacked up fees and kickbacks to the lender. When in doubt about what is going on during your house closing, contact a Dallas business lawyer. Not only will they be able to tune you in, but explain what you need to do to avoid being scammed.

Ty Gomez writes for the Gomez Law Group, a Dallas employment lawyer and Dallas business lawyer. To learn more, visit Gomezlawyers.com.

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