Proposed Florida Law Raises Roadblocks for Car Buyers to Sue Dealers
There are bills pending in the Florida legislature (Senate Bill 1512 and House Bill 0929) that if passed, will make it more difficult for consumers to sue car dealers that break the law.
The law that will be amended is Florida Statutes Section 501.975. That section of the law is part of the Florida Deceptive and Unfair Trade Practices Act (FDUTPA ) that specifically applies to deceptive and unfair practices of motor vehicle dealers. Florida Statutes Section 501.975 spells out in great detail acts or practices that are “per se” violations of the act, in order to protect consumers from such unfair and deceptive dealer practices.
The proposed law will require that before any consumer can sue a dealer, they must first send “notice of claim” to the dealer informing them that they have violated the act. While the pre-suit notice requirement alone may not appear to onerous on consumers, the proposed law allows dealers the opportunity to make the claim go away by paying the claim, plus a 10% surcharge (limited to $500) within 15 days, before they can be sued.
A similar law was recently proposed in Ohio, which consumer advocates and the National Consumer Law Center (NCLC), argued against saying it would “force consumers to continue to do business with fraudsters” and “remove incentives for fraudulent businesses to change their practices.”
This proposed limitation will substantially impair the consumer protections that car buyers have in Florida today. The original FDUTPA statute was based on the 1973 Uniform Consumer Sales Practices Act (UCSPA) and the Model Little FTC Act.9 In fact, FDUTPA is commonly known as the “Little FTC Act.” In carving out a state law, the Florida Legislature expressed its intent to afford “due consideration and great weight” to interpretations by federal courts and the Federal Trade Commission regarding the definitions of unfair and deceptive practice.
Prior to its complete repeal in 1997, a Department of Legal Affairs rule provided for the regulation of motor vehicle sales, and unfair and deceptive practices. This rule was originally adopted through specific authority of FDUTPA. Other than the agency rule, the only other authority on this issue at that time appeared in s. 320.27, F.S., which provides for civil fines and the denial, suspension, or revocation of a motor vehicle dealer license for certain violations. In 2001, the Legislature codified the repealed Department of Legal Affairs rule, thereby statutorily extending the application of FDUTPA to motor vehicle sales.
It is a violation of FDUTPA for a dealer to:
- Misrepresent that a motor vehicle is a factory executive, executive, or a demonstrator vehicle or to misrepresent previous usage or status, quality of care, regularity of service or general condition, or that it has not sustained certain damage;
- Sell a vehicle without full written disclosure of any warranty or guarantee terms, obligations or conditions that the dealer or
manufacturer has given to the buyer; - Fail to uphold an express or implied warranty, or to misrepresent warranty coverage;
- Obtain signatures from a customer on contracts that are not fully completed at the time the customer signs;
- Require or accept a deposit from a prospective customer before entering into a binding contract for the purchase and sale of a vehicle
unless the customer is given a written receipt with certain information; - Add unauthorized fees and charges to the cash price of a vehicle;
- Change the odometer reading of a vehicle;
- Sell a vehicle without disclosing its actual year and model;
- File a lien against a new vehicle paid by check without disclosing that a lien will be filed if paid by check and the procedures and cost to
the buyer for gaining title to the vehicle postlien; - Increase the price of a vehicle after accepting an order of purchase or a contract, unless authorized by law;
- Advertise the price of a vehicle unless the vehicle is identified by year, make, model, and a commonly accepted trade, brand, or style
name; - Charge for any pre-delivery service required by the manufacturer, distributor, or importer for which the dealer is reimbursed by the
same; - Charge for any pre-delivery service and fail to disclose that the charge represents costs and profit to the dealer for such items as
inspecting, cleaning, and adjusting vehicles, and preparing documents relating to the sale;or - Fail to disclose damage to a new vehicle of which the dealer had actual knowledge if the dealer’s actual cost of repair exceeds 3 percent
of the manufacturer’s suggested retail price or $650, whichever is less.
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