The internet offers a wealth of information—but not all of it is law. Social media “legal experts” are increasingly misinforming consumers about laws like the Truth in Lending Act (TILA), and—without fully understanding their own content—dealers are finding “legal notices” landing in their inboxes. At Charapp & Weiss, LLP, we recognize the risk this poses to dealers: mistaken legal claims may look official but can still threaten your bottom line. Here’s how savvy dealerships can distinguish substance from folly.
Know Your TILA Rights—What Doesn’t Apply
One TikTok-fueled myth claims customers have a right to rescind a motor vehicle sale under TILA. That’s not accurate. The right to rescind is strictly tied to “principal dwellings,” such as home mortgages—not automobile loans. Courts have consistently ruled that typical vehicle transactions do not qualify, so rescission demands in these cases are legally unfounded.
Another misleading claim asserts that down payments are illegal. In reality, TILA explicitly allows down payments. When properly disclosed—as with the amount financed computed as “cash price less down payment and trade-in”—dealerships comply with TILA requirements without dispute.
Handling Dubious Legal Claims
Here’s a typical scenario: a customer submits a notarized affidavit claiming TILA violations, cites regulations such as 12 CFR § 1026.23 and 15 U.S.C. § 1635(a), and CCs the FTC. These claims often catch dealers off guard—but clarity and strategy can defuse them.
First, pause and assess. Just because a document looks legal doesn’t mean it’s legally correct. Understand the claim and evaluate whether it’s based on a misinterpretation.
Second, consider your position. If the customer hasn’t made a first payment, your finance source might require you to repurchase the deal. If the vehicle is still in inventory and unsold, an early resolution may be in your best business interest—even if the claim lacks merit.
Finally, seek legal guidance. Even a baseless consumer claim can escalate if handled incorrectly. Getting counsel involved early protects your dealership and ensures any response is aligned with regulatory expectations.
Protect Your Dealership—Policies and Preparedness
Educate your staff about legal myths circulating online. Equip them to identify false legal assertions and route concerns to the appropriate internal team or counsel.
Stick with standardized Retail Installment Sales Contracts (RISCs) from approved vendors like Reynolds & Reynolds or your finance source. Proper documentation and full disclosure of required terms—such as down payments, finance charges, and loan details—are your best shield against faulty consumer claims.
Conclusion
The digital age has empowered consumers—but it has also spread dangerous legal half-truths. As a trusted advocate for automobile dealers, Charapp & Weiss, LLP, urges caution, clarity, and counsel when handling “legal” documents fueled by online misinformation. When in doubt, strategic legal guidance is your best safeguard.
Read the full article here: [Barrie: On The Internet, Everyone’s A Lawyer]