This article outlines some of those rights,
with points to keep in mind when you make any commercial transaction.
Purchasing an Automobile
For most people, buying a new car or truck is a large investment.
That’s why you should be adequately prepared before
you make a final purchase decisions. Here are a few points
to remember:
- have a realistic estimate of your budget and the features
you really need in a car and
- don’t let the salesperson shift the discussion
about price to a discussion about how large a monthly
payment you
can afford; this is the surest way to overpay for a
car!!
- visit several car dealerships
- be prepared to negotiate
- do not let yourself be pressured by the sales person
- ask
questions about anything that confuses you about the
car or the deal
- be wary of any add-on charges like paint sealant
and window etching
- understand the terms of dealer or manufacturer
warranties
- carefully read the purchase contract before signing
it and
- never sign a “bailment agreement.” Many
bailment agreements are a way to “steal” your
trade-in; when the dealership cannot get you
financed, these agreements
allow
the dealer to sell your trade in, repossess the
new car, and only pay you a wholesale price for the trade
in, less a large
charge for each mile you drove the new car!
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Lemon Law
In addition to the dealer or manufacturer warranty,
the Texas Motor Vehicle Commission Code, also known
as the "Lemon
Law," provides new automobile buyers protection
from obviously defective new automobiles.
The law provides that after reasonable attempts to
repair a defect have been unsuccessful, the consumer
may notify
the manufacturer
and seek assistance from the Texas Motor Vehicle
Commission.
The determination of a “reasonable” number of
attempts at repair differs, depending on the type of defect.
For most
problems, you have made a reasonable effort if there
have been four or more unsuccessful attempts to repair the
defect (two
within the first 12 months or 12,000 miles after
taking delivery, and two more within 12 months or 12,000
miles of the second
repair attempt).
If, however, the defect creates a serious safety
hazard, like a "life-threatening" defect
that would cause the car to go out of control or
catch fire, you are considered
to have
made reasonable efforts to have the problem corrected
after two or more unsuccessful repair attempts (at
least one of which
was
within the first 12 months or 12,000 miles and a
second within 12 months or 12,000 miles of the first).
If, after these reasonable attempts to correct the
defect, the problem still exists, you should notify
the manufacturer
in writing
about the defect before the express warranties on
the vehicle expire.
If these efforts are not successful, you can contact
the Texas Motor Vehicle Commission in a written complaint
to
the Commission,
outlining the problem and the history of attempts
at repair. The Commission will forward a copy of
the complaint
to
the manufacturer and the dealer, asking for their
response.
If it appears that the problem can be resolved without
a hearing, the Commission officer may bring the parties
together
for mediation
to try to reach a settlement. In cases in which a
hearing is needed, all parties are notified at least
20 days
in advance of the hearing of the time and place for
the proceedings.
During the hearing, each party will be allowed to
present testimony and any other evidence, such as
documents
and repair records,
and each will be subject to questioning by the other
side. The car owner also will be expected to make
the car available
for
inspection. The hearing officer must file a written
decision within 150 days of the filing of the initial
complaint,
although there are some provisions for extending
this period.
If the Commission officer finds that the defect in
the car cannot be corrected, he may order the manufacturer
to replace
the car
with a comparable vehicle, or may order the manufacturer
to take the vehicle back and refund the purchase
price, minus a reasonable
cost for the use of the car. If the Commission determines
that the car is not subject to repair or replacement,
the complaint
may be dismissed, but the manufacturer still may
be ordered
to repair the car so it meets the warranty specifications.
While the Texas Lemon Law is designed to assist parties
in resolving disputes without going to court, either
party may
seek judicial
review of the Commission's decision by filing for
review in Travis County district court in Austin
within 30
days of the final decision.
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Used Vehicles
Used vehicles are not covered by the Texas Lemon
Law, but used car purchases are governed by the
Deceptive Trade
Practices -
Consumer Protection Act.
For example, it is illegal under the Act for a
car dealer to entice customers to buy cars by falsely
advertising that the
dealer is going out of business. It also is illegal
for
the dealer to make false or misleading statements
regarding the
reasons
for a price reduction. A dealer also may not try
to get a consumer to buy a vehicle by failing to
disclose
information
about the
car that, if known, would make the consumer unwilling
to buy the car. For example, any car that was returned
to
a
manufacturer
after a hearing under the Lemon Law must include
a notice providing this information to any potential
buyer.
The only warranties that accompany a used vehicle
are those expressly provided by a dealer or an
unexpired manufacturer's
warranty.
Therefore, it is extremely important for you to
thoroughly inspect a used automobile before purchase,
and discuss
whether the car
is covered by any warranty.
Federal law requires that all used cars sold through
dealers must indicate on the buyer's guide or window
sticker whether
the car is being sold with or without a warranty.
The buyer's guide should clearly state whether
the vehicle
is being
sold "as
is" (without any warranty) or "warranty" (with
the specific provisions of the warranty listed
on the window sticker). Consumers should closely
inspect the tires, suspension,
engine, drive train, steering, brakes, and interior.
In fact, it is probably wise to have a mechanic
conduct the inspection.
Because used vehicles are "used," the number of
miles a vehicle has been driven is important. Vehicles with
lower
mileage typically are more valuable than those
with higher mileage. Federal
and state laws prohibit a seller from rolling back
or changing the number of miles on an odometer. Under Texas
law, the seller
of a used vehicle is required to state on the title
assignment the total number of miles the vehicle has traveled.
A consumer
should get a copy of the odometer statement before
signing a contract and if the odometer reading seems suspect,
he or
she
should check the odometer statement that the current
owner received when the vehicle was purchased.
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Automobile Repair
According to the Texas Attorney General's Office,
problems associated with repairing an automobile
consistently
rank as the number
one consumer complaint. Texas does not have a
comprehensive law specifically governing car repairs, but
the
Texas Deceptive Trade
Practices-Consumer Protection Act includes several
sections dealing with repairs. Under the Act,
it is illegal for
an auto repair
dealer to: 1) knowingly make false or misleading
statements about the need for parts, replacement,
or repair service;
2) falsely
represent that work or services have been performed
on a car, or that parts have been replaced; (3)
claim that
replacement
parts are original or new when in fact they are
used, second-hand, or refurbished; (4) advertise
goods
or services with the
intent
not to sell them as advertised. When selecting
a repair shop, a consumer may wish to contact
the Better
Business
Bureau
or the Office of the Texas Attorney General to
ask if anyone has
complained about the shops the consumer is considering.
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Vehicle Repossession
When buying a new vehicle, and sometimes when
buying a used vehicle, a consumer often will
make the
purchase on
credit.
A buyer should
remember that the creditor retains significant
rights over the vehicle if the buyer does not
abide by the
loan agreement.
If
a consumer defaults on a loan, the creditor
has legal authority to enter the consumer's property
and seize
the vehicle
at any time and without prior notice to or
consent of the consumer,
even in the middle of the night, so long as
it is done peaceably. After repossession, the creditor
may keep
the vehicle as
compensation
for the unpaid debt or resell it. In either
case, the creditor must inform the consumer. The consumer
has
the right to
demand that the vehicle be sold and that any
money received from
the sale beyond the amount of the debt be returned
to him or her.
If the vehicle is to be sold at a public auction,
the consumer must be notified of the date in
advance (in
cases of a
private sale, the consumer is notified after
the sale). However the
vehicle is sold, the sale must be conducted
in
a "commercially reasonable
manner" and the price must approximate
the vehicle's fair market value. Of course,
the creditor also may reinstate the
consumer's loan or allow the consumer to buy
the vehicle back. It is especially important
for the consumer to keep loan documents
in a safe place, and to get in writing any
agreement that allows for a change in the terms
of payment.
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Telemarketing Fraud
Telemarketing fraud is a billion dollar business
in the United States. A fraudulent telemarketer
will call
a
consumer with
some sort of fictitious product, service,
or prize; talk with the
consumer for awhile, then get the consumer
to divulge his or her credit card number
or a checking
account
number. Later, a
fraudulent telemarketer may make unauthorized
charges or
withdrawals against the consumer's account.
The elderly citizen is a favorite
target of fraudulent telemarketers. While
people over age 65 comprise only 12 percent of the
national population,
they make
up 30 percent of telemarketing fraud victims.
Once a consumer has lost money to a fraudulent
telemarketer, it is difficult to get it back.
Telemarketing con
artists are quick to close up shop and move
to another city
or state to
avoid police. The best way for a consumer
to protect himself or herself
is to be able to identify fraudulent telemarketers
before becoming a victim. A telemarketer
may be a con artist
if:
- The telemarketer
uses high-pressure tactics
- The offer sounds
too good to be true
- The consumer must act "now"--or the offer will
no longer be good
- The telemarketer is unwilling to provide references
or written material to back up his or
her claims
- The telemarketer asks for a credit card or checking
account number for any reason
other than to make a purchase (i.e. for "verification" purposes,
to pay shipping and handling, redemption fees, gift taxes, etc,
on a purportedly "free" gift
or prize)
Consumers should not allow themselves
to
be pressured and should take the time to
make
prudent decisions.
A consumer
also should
request written information about the product
or the company; check with the Texas Attorney
General's
Consumer
Protection
office or the local Better Business Bureau
to see if any complaints
have been filed against the company; and
ask what recourse is available should the
product
be unsatisfactory.
Under Texas law,
companies are required to be registered
and bonded as telemarketers. Consumers
may check
with the
Texas Secretary
of State to
determine if a company has met these requirements.
A consumer also may
contact the local Chamber of Commerce to
see if the telemarketer is a member, or
may contact
the
Assumed
Names division
of the local county clerk's office to see
if the telemarketer
has registered
its business name. If necessary, a consumer
should simply hang up the phone if he or
she suspects
the caller of
fraud.
Under Texas law a telemarketer may not
call consumers at home before 9 a.m. or
after
9 p.m. on a weekday
or Saturday,
or before
noon or after 9 p.m. on Sundays. The law
also requires that a telemarketer provide
the consumer
with the
name, street
address,
and phone number of the business for whom
the telemarketer is calling, as well as
the name
of the person calling
and the names
and titles of those in charge of the business.
A note of caution, however: fraudulent
firms often will change
names
to avoid detection.
Any contract made as a result of a telephone
sales call is not valid and enforceable
against a consumer
unless
the contract
is put in writing; fully describes the
same goods or services discussed on the
telephone;
contains
the name,
address,
and business
telephone number of the seller; and sets
out in full
the total price, and any terms and conditions
affecting the
sale. Texas
law further provides that a telemarketer
(except a public charity) must offer a
full refund
for all undamaged
and/or
unused goods
returned by the consumer within seven days
after the consumer received the goods or
services. The seller
must process
the refund within 30 days after the consumer
returns the merchandise
or
cancels an order for undelivered goods.
Consumers can protect themselves from disreputable
telemarketers by requesting full information
before completing any
transactions. If the telemarketer refuses
to comply with these requests,
simply hang up.
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Debt Collection
Texas has very specific guidelines regulating
what debt collection agencies can and
cannot do when
attempting to collect unpaid
debts. Most of these regulations are
set forth in the Deceptive Trade Practices-Consumer
Protection
Act.
Under
Texas law
debt collectors cannot:
- Falsely accuse
the debtor of fraud or other
crimes
- Use or threaten to use violence
or other criminal acts to collect
the debt
- Threaten arrest
of the debtor,
or threaten
to repossess or seize property of
the debtor without proper court proceedings
- Make
collect
telephone
calls to the
debtor without
disclosing the true name of the caller
before the charges are accepted
- Harass
the debtor
or the
debtor's
family
with frequent
communication, by calling anonymously,
or making frequent or continuous calls
- Use
profane or
obscene language
- Mail any documents
to the debtor that falsely appear
to be from a court or other official agency
- Misrepresent
the
amount
of the debt
or falsely
claim that legal action has been taken.
The federal Fair Debt Collection Practices
Act also governs debt collection practices,
specifically
regulating
those
collectors
who work for professional debt collection
agencies and attorneys hired to collect
debts. While
similar to the
Texas law, the
federal statute also provides that these
collectors cannot:
- Communicate
with a debtor before 8 a.m. or after
9 p.m.
- Call the debtor at work if the
collector
has reason
to know
that the debtor's
employer does not permit such calls
A consumer who disputes a debt should
send written notice to the debt collector
detailing
the nature
of the dispute.
The debt
collector must then provide the consumer
with information on how to contest the
debt, and,
upon request,
must assist the consumer
in completing the necessary forms. The
debt collector must respond to a consumer's
request
within 30
days after receiving
the written
notice of the dispute, and must correct
any improperly reported item.
A consumer who feels a debt collector
is using improper, harassing, or fraudulent
collection
methods should
notify the collector
in writing that he or she wants to stop
all further contact from the collector.
The consumer
should
keep a copy of
the letter
and mail the original to the collector
by certified mail. A consumer also may
seek
a civil injunction
and damages
against a collector,
and/or may report violations to the Office
of the Attorney General to determine
if
civil or
criminal
actions may
be taken against
the collector.
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Health Spas
Due to past abuses in marketing and contracting
for services, Texas now regulates the
conduct of health
spas. A health
spa is any business that provides memberships
for exercise instruction,
training, or use of exercise facilities
to the public. Under Texas law, every
contract for the
sale of health
spa services
must be in writing, must be signed
by the purchaser and the seller, must contain
the
entire agreement,
and must
contain
the following:
- A three-day penalty-free cancellation
period
- A provision for cancellation
of
the contract
and a
refund if the
health spa goes
out of business or moves more than
ten miles, unless the member has access to
other facilities
of the
company within
ten miles
- A provision for a prorated refund if
the consumer dies or becomes physically
unable
to use the
health spa's
facilities
If the contract is for a health spa
not yet open for business, the contract
must
clearly
state
the date
when the health
spa is expected to open. If the health
spa fails to open or fails
to remain open for 30 days, the member
is entitled to a full refund, unless
the member
has access
to facilities at another
of the company's locations within
ten miles of the new
spa. Furthermore, no health spa contract
can exceed three years,
except an installment
contract, which may not exceed five
years. Texas law requires
that all health spas register with
the Secretary of State and post a
proof-of-registration certificate at each
business location.
Any complaints concerning a health
spa
should
be directed
to the Office of the Secretary of
State, Statutory Documents Section.
When choosing a health spa, a consumer
may wish to contact the local Better
Business Bureau or
the local
Chamber
of Commerce.
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Home Solicitation
The Texas Home Solicitation Transaction
Act, as well as the more general
Deceptive Trade
Practices-Consumer Protection
Act and
a variety of federal laws regulate
home solicitations, or “door-to-door” sales.
Under the Texas Home Solicitation Act, a door-to-door sale is
defined as a purchase of goods or services for $25 or more (in
cash or installments) that takes place at a location other than
the seller's place of business. A few business transactions exempted
from the Act are: the sale of insurance and farm equipment; certain
real estate sales, when an attorney or broker assists in the
sale; phone sales; and those sales resulting from prior negotiation
at the seller's place of business. The consumer must be alert
to the practices of unscrupulous door-to-door sales representatives
and should be aware of his or her rights when dealing with these
salespeople. For example, a home seller is required to provide
a consumer with a "notice of cancellation" form
whenever a sale is made and/or
a contract is signed. To cancel
a sale
or contract the consumer must simply
sign and date the cancellation
form and mail it back to the seller.
To ensure a full refund,
this must be done before midnight
of the third business day after
the sale or signing of the contract.
If the seller failed
to
provide the proper cancellation
form as required, the consumer
still can cancel the contract by
sending a cancellation notice
to the seller within the three-day
time period. The consumer's notice
of cancellation must be in writing
and either delivered
to the seller or the post office
within the cancellation period.
If a consumer cancels a home solicitation
purchase within the three-day
period, within ten business
days of the
cancellation the seller must
return to the consumer any payments made
and
any notes or other evidence of
indebtedness. The seller then
is entitled to reclaim
any merchandise in the
consumer's possession, and must
notify the consumer within ten
days
of the cancellation
whether he or she intends to
retrieve the goods. The seller may not require
the consumer
to
pay to return
the goods.
If the seller
fails to ask for return of the
merchandise within 20 days of
cancellation, the
consumer cannot
be
forced to return
the goods.
In any event, a consumer may
retain purchased goods until he or she
has recovered monies
spent and/or
any
signed
contract
or note.
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