Why is this important? In 1999, the National Association of Attorneys General defined and denounced payment packing with a resolution: WHEREAS, “packing” is the deceptive practice of misrepresenting monthly payments to consumers during auto sales and lease negotiations in order to facilitate the sale of automobile related products and services; and …the key word being “deceptive.” Just ask Sage Auto Group, an eight-rooftop group in Southern California. The Federal Trade Commission (FTC) announced they would be part of a settlement totaling more than $3.5 million to customers who fell prey to the dealership group's deceptive practices in 2014-16. Part of the allegation against the dealer was that Sage Auto Group was also accused of including products in payments the customer didn’t know about or thought were free. “Since 2015, [New York AG] Schneiderman has obtained more than $17 million in restitution and penalties as part of his office’s crackdown on the practice of ‘jamming,’ or payment packing.” In 2015, “Three jointly owned dealerships, which claim to be the largest combined Honda dealerships in the country, …agreed to pay $13.5 million to settle charges that they not only sold F&I products that violated state and federal laws, but also allegations that they payment packed, or ‘jammed,’ the questionable products into customer deals.” And get this-Since 2015, [New York AG] Schneiderman has obtained more than $17 million in restitution and penalties as part of his office’s crackdown on the practice of ‘jamming,’ or payment packing! So, what is the rule? First, a little background. Back in the 1990’s, when we were developing the first F&I menus and experimenting with, and testing the F&I menu concept, we spent a lot of time making sure the menus and processes we developed, and the training we provided in their use, stayed well within the FTC and state’s Attorney General’s compliance guidelines. At that time, there was a new wave of compliance enforcement action regarding the way car deals were being negotiated and the use of deceptive negotiating tactics. From Washington State in 1997. And from the Orlando Sentinel in 1997 While Washington State was leading the way on enforcement of these issues, other states began to take enforcement action. And, as we attempted to make sure we met the various state guidelines, we were advised that, regardless of state to state interpretations of deceptive practices, the law that applied to deceptive practices in financing came under federal law, the Truth in Lending Act (TILA) of 1968. 14
15 Publizr Home