Consumer groups fear the backhand effects of NJ car recall legislation
Advocates for the automobile industry say a measure advancing in the state Legislature is designed to increase protections for consumers and help defend car dealers in the event of a future complaint.
Advocates for the consumer say the measure actually creates a loophole in existing regulations that can help dealers pull one over on car buyers, during the purchase and beyond.
"We have some very strong consumer protections in the state already, and we do not want to see any weakening of those laws," Beverly Brown Ruggia, a financial justice organizer for New Jersey Citizen Action, said Tuesday during a teleconference with reporters.
Representatives from a number of safety, consumer and environmental groups voiced their concerns about the legislation, which already received approval from the Senate, that they say would allow car dealers to get away with selling dangerous, recalled used vehicles in New Jersey.
Under the legislation, sponsored by Democrats Lou Greenwald in the Assembly and James Beach in the state Senate, a car dealer would be required to provide information to a prospective purchaser about outstanding recalls.
Federal law prohibits dealers from selling new vehicles with unresolved recalls. That's not the case for used cars, however. Consumer advocates say it should be.
Opponents of the bill point out a provision in the language that protects dealers in the event of transactions that take weeks or months from start to finish. For example, a dealer presents a no-recall history in August to an interested buyer, a recall pops up in September, and the consumer officially purchases the vehicle in October, never learning of the new problem.
On Friday, the attorney for Toms River resident Trinity Wixner filed a lawsuit against Lester Glenn Chrysler Dodge Jeep.
According to Wixner, the dealership in July 2017 offered her a copy of a Carfax report from the month of May that pulled up no unaddressed safety recalls. But, she said, Chrysler issued a recall on her vehicle in the month of June, nearly a month before the vehicle was sold to her, according to a government website. The problem involved a defective alternator that could catch fire and would be prone to stalling in traffic without warning.
John Perillo, director of sales for Lester Glenn, said Wixner's claims are not accurate and the recall had a launch date of August 24.
"We are very confident and we have proof that we did not sell this car with an open recall," Perillo said. "This proof was also given to the customer when they tried trading the car into us."
Jim Appleton, president of the New Jersey Coalition of Automotive Retailers, said most used-car sales take a matter of hours or days, so the odds of an unknown recall are slim. And, he said, responsible dealers would know to provide an updated report anyway if the car-buying process takes several weeks or months to unfold.
"Responsible auto retailers are already disclosing to customers if a vehicle is under recall at the point of sale," Appleton told New Jersey 101.5. "What this law does is clarifies and strengthens that requirement so that even the most unscrupulous of auto retailers would not be confused or think they weren't obligated to make such disclosures."
Attempts to reach the sponsors of the legislation were unsuccessful. But Appleton said if the language in the bill is causing confusion, the sponsors of the bill, and its opponents, should have a conversation.
"The Consumer Fraud Act still requires a dealer to make the disclosure at the point of sale, and a failure on the part of the dealer to disclose a material fact about the product at the point of sale is textbook consumer fraud," Appleton said. "All this bill is trying to do is spell it out in black and white."
Appleton said the proposed law would also help in a dealer's defense should a consumer claim they were never made aware of a recall.
Opponents of the measure say it does not clarify how notice of the recall must be delivered — they fear it could be hidden in a stack of documents that a buyer needs to sign.
The bill also includes language that lessens the amount of compensatory damages an individual can receive in the event of court action, and caps the amount attorneys can be awarded in these cases.