California Lemon Law Blog

In a previous post, we discussed California’s Vehicle License Fee (VLF) increase that was initiated in May of this year. Although it is understandable why vehicle owners would object to an increase in fees, as a part of the state’s budget plan to combat a $42 billion shortfall, there isn’t really anything we can do about it.

To jog our readers’ memory, the new legislation that enabled DMV to raise the VLF from 0.65% to 1.15% for registration payments due on or after May 19, 2009 applies to trailer coaches, automobiles, motorcycles, and commercial vehicles with confirmed gross operating weight lower than 10,001 lbs. The VLF enhancement may last until June 30, 2013. If you are not sure as to the exact vehicle license fee you must pay, you can check your vehicle registration renewal notice or validated registration card. You can also visit www.dmv.ca.gov for more information.

Continue reading "Understanding California's Vehicle License Fee Increase" »

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Posted In: Car Repair Fraud , Law & Information , Used Car Fraud

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There are many different kinds of fraud associated with motor vehicles. Although consumers are typically more concerned with used car fraud or auto repair fraud in California than they are with auto insurance fraud, insurance schemes also have the potential to affect the wallets of consumers. A recent article from insurancejournal.com reported that a 56-year-old San Jose man was arrested for auto insurance fraud and faces criminal charges for filing a counterfeit motor vehicle claim, perjury, and falsely reporting a crime.

According to the story, this particular man went as far as reporting his “stolen” vehicle to the San Jose Police Department and filed a stolen vehicle claim with his insurance company. Sentry Insurance suspected the claim was fraudulent and reported the incident to the Department of Insurance. An investigation conducted by the California Department of Insurance (CDI) discovered that before the man reported his vehicle to be stolen, he purportedly tried to use the car as collateral for a loan. This incident serves as an important reminder that although our economy is struggling, turning to fraudulent actions is not a solution and there is no excuse for such behavior.

Based on the article, the California Department of Insurance received approximately 300 more vehicle theft and arson claims in 2008 than 2007. For consumers who really have had their vehicles stolen, fraudulent cases do nothing more than make the recovery process that much more difficult.

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Posted In: California Lemon Law , Car Repair Fraud , Law & Information , Unfair/ Deceptive Business Practices

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There has been much controversy lately regarding California Assembly Bill 1200, also known as “the steering bill”, which did not pass this week in a 19-17 Senate vote. California Assembly Bill 1200 would remove restrictions against an insurer to require or suggest that a vehicle be repaired at a specific auto repair dealer. If the bill had been approved, insurers would have apparently had more leeway in steering customers to their preferred shops. According to a report, it is possible that the bill may be reintroduced.

At the heart of the criticism is the notion that it does not give consumers the protection they need or require. A California-based consumer advocacy group that opposes the Bill, Consumer Watchdog, has published multiple insurance company documents that are said to show evidence of anti-consumer practices and direct repair programs (DRPs) that do not really help consumers. In fact, one contract between an insurance company and its desired group of body shops revealed that the auto body shop was being pressured into maintaining lower costs, at the expense of having their contract terminated if they did not comply.

The executive director of Consumer Watchdog said that these questionable contracts create “reverse competition.” Instead of competing for customers, body shops are fighting for insurer referrals, which are ultimately determined by the shop’s capability of cutting its rates, thus leading to poor auto repair work stemming from those cut-rate prices. In addition, another document revealed that a body shop was reprimanded for using more factory parts than an insurance company preferred. Also, it was recommended by the insurance company that the body shop use more after-market parts to lower costs.

Continue reading "California Steering Bill Drives Off the Beaten Path: Senate Does Not Approve" »

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Posted In: Car Repair Fraud , Law & Information , Unfair/ Deceptive Business Practices

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Thousands of consumers rely on auto repair shops to help them get their vehicles back up to par, but some consumers do not realize that they have the right to choose which shop to go to. Apparently, according to a Connecticut Attorney General, there are a number of auto insurers displaying questionable behavior, requiring consumers to go to particular body repair locations that auto insurers deem acceptable. In opposition to the notion, the regional manager for the Property Casualty Insurers Association of America (PCI) has said that these claims are not accurate.

So what should consumers do? The simplest answer is that consumers are not obligated under any law to go to a certain car repair service; it is your right as a consumer to make that decision. However, the recent challenge against insurer practices raises the question of whether or not laws have in fact been violated, and for how long these violations have been taking place. Essentially, consumers may have been fooled into believing that the decision is not within their power. One of the accusations being made against insurance companies is that they are not adhering to a 1963 consent decree.

Connecticut’s Attorney General stated, “Almost 50 years later, insurer steering is still a scourge…this outpouring of complaints shows that problematic practices persist.”

As the federal government works with state officials to look deeper into the matters surrounding these possible deceptive business practices, it can’t hurt for consumers to be suspicious of suggestions pertaining to body shop referrals made by their insurer. When getting your vehicle repaired, no matter what a shop’s reputation, it is important to do your research and be aware of common forms of car repair fraud in California so that you don’t become a victim of it.

Continue reading "Insurance Procedures for Auto Repair in Question: Where Should Consumers Go?" »

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Posted In: Car Repair Fraud , Unfair/ Deceptive Business Practices

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A recent article from searchautoparts.com reported that more and more cases of auto insurance fraud have been committed across California, perhaps brought on by the downtrodden economy. In fact, the California Department of Insurance (CDOI) reported a 25 percent increase in the number of suspected vehicle arson fraud cases from 2007 to 2008 and a rise in auto theft fraud referrals as well.

A CDOI Commissioner stated, “Many Californians are facing a host of financial challenges in today’s economy, but I want to remind everybody that you will only compound your problems if you break the law and commit fraud in search of a quick fix…our enforcement experts are working hard to crack down on anyone attempting to skirt the law for financial gain.”

The CDOI Commissioner said that enforcement officers examine every case brought to the Department’s attention and that referrals have been received from local law enforcement agencies, directly from consumers, and from insurance companies. The department obtained almost 300 more suspected vehicle theft and vehicle arson cases statewide in 2008 than in 2007.

Continue reading "California Auto Insurance Fraud Has Made a Notable Increase" »

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Posted In: California Lemon Law , Car Repair Fraud , Law & Information , Unfair/ Deceptive Business Practices , Used Car Fraud

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We informed our readers when the Car Rebate Allowance System (CARS) program under the management of the National Highway Traffic Safety Administration (NHTSA) was launched, but no one could quite calculate its paramount affects. It didn’t even take a complete week for car dealerships to receive a flood of consumers that soaked up the $1 billion financial plan’s set-up for “clunkers” to be exchanged for vehicles with more fuel efficiency. Who could blame them? Having the chance to save money in the long run with a more environmentally friendly car by obtaining $3,500 or up to $4,500 rebates is quite irresistible.

Based on a recent report, in response to positive feedback of the program, on June 31, 2009, the House granted $2 billion more for CARS, giving more consumers the chance to join in. It’s not certain at this time how long the new funds will last, but while they do, it is bound to make lots of consumers happy now and for a good amount of time into the future.

From what we have seen up until this point in the year, auto sales in the United States have been extremely low; however, with the overwhelming response and utilization of the CARS program, auto sales have been the highest for 2009. Although this is an exciting fact that has been quite an asset to the auto industry, car fraud may be an issue for concern in some rebate sales and it is something that hopefully consumers can avoid experiencing.

Continue reading "Cash for Clunkers Car Rebate Allowance System Re-Fueled by Additional Funds " »

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Posted In: California Lemon Law , Car Repair Fraud , Law & Information , Unfair/ Deceptive Business Practices , Used Car Fraud

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On July 1, 2009, a federal program signed into law by President Obama provides a rebate for people who trade in older gas-guzzlers for new, more fuel-efficient automobiles. The Car Allowance Rebate System (CARS) program is applicable to car purchases that occurred on or after July 1, 2009. People with vehicles that qualify for the program may be able to receive rebates between $3,500 and $4,500 on the purchase of a new qualifying vehicle. To qualify for the program, the following conditions must apply:

• The vehicle traded in must be less than 25 years old by the trade-in date and in drivable condition.


• The rebate applies only to the purchase or lease of new vehicles with a manufacturer’s suggested retail price of $45,000 or less. The new vehicle can be from a foreign or domestic car manufacturer. Pre-owned vehicles are not eligible for the program.


• Generally, the vehicle being traded in must get mileage of 18 miles per gallon or less (different requirements apply to some cargo vans and very large pick-up trucks).


• Trade-in vehicles must be registered and insured continuously for the full year preceding the date of the trade-in.


• Participating auto dealers will apply the rebate at the time of purchase so no vouchers are required.


• The CARS program runs through Nov 1, 2009 or when the program funds are exhausted, whichever comes first.


• Vehicles traded in must be destroyed. Therefore, the value you negotiate with the dealer for your trade-in is not likely to exceed its scrap value. The new law requires the dealer to disclose an estimate of the scrap value of your trade-in vehicle.

The CARS program is implemented and overseen by the National Highway Traffic Safety Administration (NHTSA), which must publish the program’s rules and regulations by July 24, 2009. The new law requires auto dealers to register to participate in the program, and the agency will update the list of participating dealers on the website. Anyone wishing to take advantage of the program is encouraged to contact dealers in their area to see which have registered. States will license the respective dealers to sell new automobiles.

Continue reading "New Federal Car Rebate Program Information" »

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Posted In: California Lemon Law , Car Repair Fraud , Law & Information , Used Car Fraud

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A body shop owner and the shop’s manager have been arrested for their role in a series of alleged car repair frauds in California. This article said that according to California insurance commissioner Steve Poizner, the two men arrested on July 1, 2009, were charged with multiple counts of auto insurance fraud. Both the 52-year-old owner and the 32-year-old manager were held on a $50,000 bail.

"Insurance fraud costs everyone money when it's passed on to consumers in the form of higher rates," says Poizner. "If you defraud an insurance company, the Department of Insurance will find you and help prosecute you."

The men were charged as a result of a California Department of Insurance Urban Auto Fraud Task Force investigation in conjunction with Farmers Insurance. The insurance company conducted inspections of repair work performed by two Choice Auto Body repair shops in Newark and Santa Clara. The 52-year-old defendant was the owner of both shops and the 32-year-old was the manager of the Santa Clara shop. After conducting 28 inspections of repairs the shops performed, the insurance company found that the shops had overbilled the company for repairs on 20 of the vehicles.

The two men allegedly repaired old parts but billed the insurance company for new parts or used parts of inferior quality in the repairs. The insurance company estimates that the alleged fraud cost them thousands of dollars. The car repair fraud case is currently being prosecuted by the Santa Clara District Attorney’s Office.

Although Farmers Insurance was the victim of the car repair fraud in this case, thousands of Californians are the victims of car repair fraud every year. Most victims of car repair fraud are unaware they have been victimized as this type of fraud can be easily hidden.

Continue reading "Body Shop Owner and Manager Arrested for Auto Insurance Fraud" »

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Posted In: California Lemon Law , Car Repair Fraud , Unfair/ Deceptive Business Practices

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