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Automobile Fraud: 1.1.2.2 Structure of the Chapters

Section 1.2, infra, lists the types of automobile fraud that are covered in this treatise. Other ways to pinpoint specific frauds include use of the detailed table of contents, this treatise’s index, and use of the search feature accompanying this treatise’s digital version.

Automobile Fraud: 1.2.1 Introduction

This treatise focuses on the misrepresentation and nondisclosure of a vehicle’s adverse history. Subsections 1.2.2 to 1.2.13, infra, provide a summary of the twelve most common areas of such abuse, with cross-references to the appropriate sections and appendices of the treatise to help readers quickly find relevant material.

Automobile Fraud: 1.2.2 Odometer Fraud

Odometer fraud, although somewhat less common than in years past, continues to be quite widespread. One type of odometer fraud involves tampering with an odometer so that it reads less than the car’s actual mileage. Odometer fraud also involves related misrepresentations about a car’s mileage and any failure to correctly make federally mandated disclosures. This treatise extensively treats odometer fraud.

Automobile Fraud: 1.2.3 Salvage Fraud

Salvage fraud involves cars which are declared a total loss and thus salvage because of a car collision, flooding, fire, or other serious physical accident. Millions of cars declared as salvage are patched up and sold to unsuspecting consumers. This treatise extensively treats salvage fraud.

Automobile Fraud: 1.2.4 Undisclosed Flood or Hurricane Damage

Often cars will undergo flood or hurricane damage, but the vehicle will not be declared a salvage vehicle, either because the damage is not quite a total loss, the vehicle is uninsured, or the state’s salvage law definitions are stricter than insurance company standards for a total loss. Challenging misrepresentation and nondisclosure of this serious flood or hurricane damage history is very similar to challenging sale of a salvage vehicle except that, by definition, the state salvage law will not apply.

Automobile Fraud: 1.2.5 Other Undisclosed Wreck Damage to Used Cars

Often cars will undergo severe wreck damage, though short of enough damage to be declared salvage vehicles, either because the damage is not quite a total loss, or because a state’s salvage law definitions are stricter than insurance company standards for a total loss. Challenging misrepresentation and nondisclosure of this serious wreck history is very similar to challenging sale of a salvage vehicle except that, by definition, the state salvage law will not apply.

Automobile Fraud: 1.2.6 Undisclosed Damage to New Cars

Often new cars will undergo damage before they are sold to the consumer, either during delivery from the manufacturer or at the dealership. The cars may then be repaired and sold without disclosure of the prior damage.

Automobile Fraud: 1.2.7 Lemon Laundering

“Lemon laundering” involves a manufacturer buying back a lemon car from a consumer, then passing on that same car to another consumer without disclosing its lemon history. This treatise extensively treats lemon laundering.

Automobile Fraud: 1.2.8 Other Failures to Disclose Preexisting Mechanical Problems

Often a car will have known mechanical problems, but will not be repurchased pursuant to a state lemon law. Instead, the manufacturer or dealer may take the car back as a sign of “goodwill” or as part of a settlement, and claim that the state lemon laundering law does not require that the vehicle be treated as a returned lemon. Other times, the car will just be traded in for a different car. Whatever the facts, a dealer may have a car with known problems that does not fall under any lemon title branding laws.

Truth in Lending: 11.2.4.1 Overview

Under both Spokeo and Ramirez, a consumer can establish standing by showing that the harm (the downstream consequences) alleged has a close “historical or common-law analogue for their asserted injury.”107 The Court listed a number of recognized tangible and intangible injuries: physical, monetary, and reputational harm; disclosure of private information; and intrusion upon seclusion.108

Consumer Banking and Payments Law: 11.1.1 About This Chapter

This chapter considers two interrelated—but very separate—issues: (1) the validity of an electronic notice, disclosure, contract, or other record and (2) whether a consumer’s electronic signature is the legal equivalent of a handwritten signature.

Consumer Banking and Payments Law: 11.1.2 What This Chapter Is Not About

This chapter does not examine other issues concerning electronic commerce, such as the rules to determine an appropriate venue or what jurisdictions can assert personal jurisdiction over the parties in a purely electronic transaction.12 Rules for warranties provided through electronic transactions are discussed in another NCLC treatise.13 Other examples of issues not examined here are whether service of process for personal jurisdiction purposes can be achieved by email or whether forum selection cl

Consumer Banking and Payments Law: 11.1.3 E-Sign

The Electronic Signatures in Global and National Commerce Act14 (E-Sign) establishes the enforceability of electronic records and signatures as a matter of federal law and preempts state laws to the contrary.15 The E-Sign Act provides that—subject to a number of important conditions—(1) an electronic signature is the legal equivalent of a signature on a piece of paper, and (2) a contract, disclosure, o

Consumer Banking and Payments Law: 11.1.4 UETA

The Uniform Law Commission (formerly known as the National Conference of Commissioners on Uniform State Laws) approved and recommended for enactment the Uniform Electronic Transactions Act (UETA) in 1999,21 and all but one state has enacted either a uniform version of UETA or UETA with amendments.22 The most notable amendments are those that add E-Sign’s special consumer consent requirements that are otherwise missing from the uniform version of UETA.

Consumer Banking and Payments Law: 11.1.5 Absence of a Writing Requirement Means Neither UETA nor E-Sign Is Implicated

There is confusion about when UETA and E-Sign apply and when they are triggered. These laws apply only when another law or rule requires a paper writing or a “wet” signature. So, for example, if one buys a book online and charges the purchase to a credit card, neither UETA nor E-Sign is implicated, because there is no underlying legal requirement that the agreement to purchase a book be signed or recorded in a writing.

Consumer Banking and Payments Law: 11.1.6 Agency Interpretations of E-Sign

E-Sign provides that federal and state agencies can issue regulations, orders, or guidance interpreting E-Sign section 7001, which validates the legality of electronic records.40 However, a federal or state agency is not permitted to adopt any regulation, order, or guidance unless several conditions are met:

Consumer Banking and Payments Law: 11.2.1 Definition of “Electronic Records”

Both E-Sign and UETA provide for the validity of “electronic records.” Both laws define “record” as any “information that is inscribed on a tangible medium or that is stored in an electronic form or other medium and is retrievable in perceivable form.”53 “Electronic” is defined in both E-Sign and UETA as: “relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.”54

Consumer Banking and Payments Law: 11.2.2 Definition of “Electronic Signature”

Both E-Sign and UETA provide for the validity of an “electronic signature.”55 An “electronic signature” is defined as an “electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record.”56 “Electronic” is defined in both E-Sign and UETA as: “relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.”

Consumer Banking and Payments Law: 11.2.3 Definition of “Transaction”

E-Sign and UETA both apply only to communications that relate to a “transaction.” If the exchange does not meet that definition, that can be sufficient to remove it from coverage under UETA (or E-Sign).63 “Transaction” is defined under both statutes as any action relating to the conduct of business, consumer, or commercial affairs between two or more persons, including the sale, lease, or other disposition of personal property—including goods and intangibles, and real property—and of services.