State Investigates Fraud Claims Against Huge RV Dealer - Ep. 7.460

welcome once again to lato's law here's steve lato this very well could be the most requested video topic of all time and it involves rvs recreational vehicles i've done videos on rvs in fact some of the most watched videos on my channel are about rvs and the perils of purchasing rvs so this one has a headline that catches a lot of people's attention and a lot of people passed it along to me and i didn't count but it looks to me like maybe 20 people at least recommended to me in the last 24 hours so i appreciate that i'll mention all of them at the end to save time fox 13 a tv station out of salt lake city had an investigation involving a dealership called general rv and their investigation has now prompted utah to look into potential fraud at general rv and here's the situation that involves alleged discrepancies on a consumer's general rv contract and after they did their story initially other customers have come forward and pointed out there's an issue with the contract and what we're talking about is the loan agreement so you go to a dealership to buy an rv if you want to you can bring in big bags of cash with dollar signs on them but we don't recommend that in america so you go in and chances are you haven't got the kind of money anyway so you say i'd like to borrow the money can i can i borrow the money take out a loan and they'll say yes in fact you can take out a really really long loan which is good because number one these things are expensive but number two they say you know gives you a long time to pay it off so you can take a nice long 10-year loan 20-year loan to purchase an rv and you say great they run your credit they say you've been approved you sit down you sign a whole mess of documents and buried in there one of those documents is a loan contract a retail installment sales contract and there are laws regarding what's on that contract and what form it must be in and it's designed to let you know everything about the loan the interest rate the amount how many payments you're gonna make are there any balloon payments and things of that nature so here's what's going on uh the story originally ran and it's since prompted the utah motor vehicle enforcement division to investigate the dealership for potential fraud and what they're talking about is a person who bought a vehicle from general rv came forward and said look at my loan contract and on their loan contract it says that the loan is for 240 months or it might be 120 because in one box it should have the number of months or the number of payments in it it appears to be smudged appears to be smudged and the word smudge keeps popping up over and over again so in addition to the smudge the math on the customers contracts do not add up each customer is ultimately faced with surprise payments of tens of thousands of dollars and so what the people are claiming is that they went into the dealership and said look i would like to buy this vehicle on a 20-year loan 240 payments is that doable they say yeah it's doable that's what the allegation is the allegation is then that the contracts that were submitted showed instead 10 years of payments 120 but actually 119 regular payments and then one gigantic balloon payment at the end so one woman they interviewed who lives in farmington was the first customer to show fox 13 or paperwork on a vehicle she purchased in 2015 now with the exception of a smudge showing number 119 typed on the same line as the number 240 the documents indicate that she thought she was scheduled to pay off her rv over a span of 20 years or 240 months the paperwork says 240 months everything on your says 240 months she said pointing to various spots in the contract i don't know how they've done it but everything on everything says 240 other than where it's been typed over because of the discrepancy she discovered she's required to pay a 63 000 balloon payment in 2025. she says i would have walked away there's no way i can come up with 63 000 now they interviewed a man who says that uh he was inspired to take a closer look at his contract uh and he lives in midvale and he thought well you know i've got rv i bought back in 2015. let's see he says well i watched fox 13 news the other day you had on tv a young lady with a smudge on her numbers so i looked at mine and i got the same thing a fox 13 review of his paperwork shows the same 240 versus 119 discrepancy that's 119 plus a balloon on his carbon copy and similar to the woman's his carbon copy is also missing signatures and this is one of the things that i always tell people you go to a dealership you buy a car or you go to a home closing you buy a house you go to a boat dealership you buy a boat whatever you bought you get a stack of papers hang on to them they're very very important i've had clients tell me i don't why would i save that stuff this is why you save that stuff and when they give you a copy of something it should be identical to the functioning copy of the legal document so when you buy something that's financed through a third party lender okay and i don't mean to get all wonky on you here but in a transaction like this you've got a buyer a seller and a lender okay generally speaking if you read the documents when you go in to buy the thing it says i'm buying this thing from you it also usually says and you're lending me the money to buy this thing from you but then what happens is they assign the paper they to a bank and they've usually got a relationship with a bank and they can usually ask a bank in advance will you take this loan if we work this out and that's usually what happens and it's a retail installment sales contract so this you know these things happen and it's very very uniform how this happens so when you sign papers at the dealership which will eventually obligate you to make payments to a third party that third party is not at this transaction so they are trusting and you are trusting that the dealership is going to handle the paperwork properly and then hand the paper over to these people and you make payments with them but this person right here is the person who's handling the paperwork and so when they sign it you sign it and they give it to you in the keys the rv and you drive off that piece of paper in your hand that's a copy of what they send to the bank those things should match the thing you have should be an identical copy of what they sent over there and i can tell you in 30 years of practicing law i have seen situations where somehow documents that got sent to one party were different than the documents given to the client it's the weirdest thing because it's almost always in fact it's always a a difference a distinction a mistake it's always an error or whatever it is in favor of the seller or the bank but it's almost always the seller so here's the thing uh the man who said that he was inspired to look at his thing says that he was surprised to see that he has a balloon payment coming of 83 000 also due in 2025. he says in his case it looks like the 119 was stamped on top of the 240. if they've done it to me and to her who else who else so a man in colorado contacted the tv station said he's got the same smudge on his paperwork from a purchase in 2013 and he'll have a balloon payment of 105 thousand dollars in 2023. said we've been stressed as to what and how we're going to deal with that the next year uh the deception in the sales market to me is just horrendous people will pull the wool over your eyes and try to take everything they can from you meanwhile a couple in tuella i'm pretty sure i'm pronouncing that correctly t-o-o-e-l-e tuella purchased an rv from the dealership in 2014 years later they found a smudge plus a surprise 73 000 balloon payments on their contract and it just seems to be that these people went in negotiated 20-year contract left thinking a 20-year contract and then later on they discover that there's uh some kind of goofy smudge going on there so this man says this is not right the way they've done this paperwork how they've done this i have no idea to me it's one of the crookedest things they've that we've ever gotten into once they found the discrepancies that family was fortunate enough to have enough money to pay off the loan so they just paid off the loan but they're saying that's not what they signed up for the wife of that couple says it gives general rv a bad name we'll never buy anything from them again we won't we won't even look at them meanwhile the director of utah's motor vehicle enforcement division stated that the fraud investigation into general rv will be taken seriously so it's an investigation he said i watched your initial story referring to the tv station and to be frank with you i thoroughly appreciated the story the first thing i did when i got the office the next morning is i wanted some answers adam herbert's i'm sorry adam herbert's who's the fox 13 investigative reporter asked him in your 20-plus years of doing this have you ever seen a case like this with multiple smudges on multiple contracts to which you responded never seen that before i mean it's one thing to say you know look we have paper jams everyone's got paper jams carbon problems but not identical across the board at different transactions i've never seen this before herbert's asked him can you even fathom a reason how that could happen and the man from utah says well they very well could have been deceived it's sure looking that way the smudged numbers are not the only shared discrepancy that all these people noticed in their contracts in each case the customers learned that the dealership sent cleaned up copies of their contracts without the smudge to their respective credit unions and again like i said what you need to make sure is that the copy you got is identical to the copy that goes to the lender and normally you wouldn't have to follow up on that you wouldn't have to but it happens and this is what's crazy so interestingly enough when a dealership has you signed paperwork and then they assign the the paper or the loan to a lender a lot of times the agreement between the seller and the lender says that if the lender discovers a discrepancy or something going on here that shouldn't be going on here they can push the loan back and say you know something this is on you guys and then they can ask the dealership to you know give them back some money that was fronted on that loan um we'll have to wait and see if any of that happens but this could get messy could get messy one of the men that interviewed earlier says if this is what they showed me i would have never done it looking at a copy of his contract on file with his credit union i just don't think it's right because they're taking advantage of the people most importantly none of the paperwork shows math that adds up to a 10-year loan in each and every case it is clear that the total payment was calculated with terms that the customer had in mind which is 20 years or 240 payments the vice president of lending for one of the credit unions said he could not comment on the specifics of individual cases but he confirmed that fox 13's method of calculating total payments in accordance with the federal truth lending act is accurate the truth and lending act is a federal statute that mandates how consumer loan contracts look you've seen them before you've bought a car boat motorcycle any of these things on on a retail installment sales contract loan so across the top is a set of boxes well here's how much this thing costs here's how much money you're borrowing here's the interest rate here's how big your payments are going to be here's how many how many payments you're going to make here's how much money you will have paid if you make all the payments on time and so on here's the cost of the credit to you okay and so that's all there and that set of numbers is mandated by federal law and if there's mistakes or issues with that it runs a foul of the truth lending act so the point is that when you glance at those you should be able to figure out pretty quickly is this a 10-year loan a 20-year loan so that's another problem here the vice president of the credit union says i think most people aren't concerned with trying to double check the math like you've done the smudge thing i don't know how that exactly happens we get the contracts and they come in through the dealership they come electronically to us if a member is concerned or confused about something they bring that to us then we're absolutely going to present them with options and discuss that because the last thing we want is someone that's unhappy with a loan and the guy from the credit union also said that the credit unions share the responsibility of making sure the math adds up on contracts before they are funded so anytime we find anything we don't think is right we're going to check it out it's totally possible that we missed that and funded that anyway totally possible and what happens unfortunately in business and i'm not saying it had to have happened here but there are large volume businesses and transactions where everyone's making money stuff's moving around and people start spending a little less time a little less time double checking the math on things because well there hasn't been a problem before so what makes you think there's one now meanwhile fox 13 spoke to multiple experts in the auto industry all of whom said the faulty math on the customer's contracts is concerning or one person was quoted as saying very concerning some believe the faulty math is even more concerning than the smudge and that's the thing is that a lot of the early reporting and has talked about the smudged contract where there's a two numbers 240 or 119 which which is it that's an issue but the boxes across top the contract not adding up properly that's a problem because that's an out and out violation of the truth and lending act now the smudges on the contract could also be a violation but not as clear-cut as just the bad math in the boxes so the gentleman from the utah government says the math does have to add up we would argue the point to the attorney's office if they interpret it as fraud then we would be able to file charges now the director of marketing and advertising for general rv sent an email to fox 13 insisting that none of their employees broke the law she repeatedly declined to provide an explanation for the smudges or the incorrect math listed on customer contracts she said we have completed a thorough investigation of the allegations and confirmed that no one at general rv did anything wrong we confirmed that general rv followed all legal requirements in this instance as part of our standard process all general rv forms including details of the payment terms are completed prior to acquiring a customer signature and do not undergo any alteration afterwards as was the case for the customer's flag by fox no alterations were made prior to or after the customers signed the documents as common in utah all balloon payments are amortized over a 240 month term the customer pays 119 payments this rate than the final balloon payment for the balance this allows the customer to have the lowest payment possible the financing contracts the customers have and which the customers signed are correctly set to this payment schedule each customer can obtain the original that form from their lending institution the original contracts that our customers agreed to and signed have the correct numbers on them the copies the customers show are carbon copies which are not part of their files with us so she appears to be making a distinction between the carbon copies given to the customers and the copies sent to the banks not sure how well that's going to fly in court she went on to state that general rv completely disagrees with the false claims of each customer however if they contact us we'll be happy to assist them with new financing options as well it appears that a few customers have carbon copies of their finance contracts that may be causing some confusion we can confirm that general rv followed all legal requirements and as part of our standard process all forms including details of the payment terms were completed using the printing and software programs available to us at the time general rv has a strict compliance policy that follows the requirements of all financial institutions and state and national laws when completing a sale with a customer meanwhile the vice president of one of the credit unions involved in the story sent an email to fox 13 confirming the financial institution is taking extra steps to review all general rv contracts so there's a few things going on here and not the least of which is the fact that some of these contracts actually have a space where it goes how many payments are going to make 240 or 119 and they're kind of messy in the same spot call it a smudge what do you want to call it but then there's a problem with the truth and lending act boxes and other places on these contracts not looking correct for the balloon payment loan but they look correct for the other loan so you can say anything you want if your general rv about whether or not your people broke the law or what you think these documents speak for themselves now for the person for general rv to say well the carbon copy you've got is not a legal copy the the thing that's legal is what we sent to the bank um i'm not sure how true that's going to be when you get to court this becomes a truth in lending a violation case but you can make that argument you can make the argument but the bigger problem you're going to have is simply the numbers not adding up correctly in those boxes so um this will continue to evolve i'm sure that fox 13 is going to stay on this story because it's a good one they dug up as more people hear about it i suspect that that more people be looking at their contracts to see how their contracts read and i also suspect that there's attorneys out there who do truth and lending act cases i know actually a few of them who do uh and cases like this to them are like you know a 25 pound lake trout coming up and actually sticking its nose in your boat going hey you guys lonely it could happen but you've been fishing a long time that's what you're hoping for and that could be what this story here is so uh it's it's an interesting story um it dovetails in nicely with all the videos i do about rvs and so i always tell people you know you got to know what you're getting into when you're buying an rv but also this is true whether you're buying any product over time whether it's a boat car rv snowmobile anything like that you're going to want to take a look to make sure that all the numbers on that document add up and yes if there's a mistake on the document that misleads you somewhere down the road you might be going to court and use that document to do something but it's better just to not let it happen in the first place so i my favorite story on this is i have had a client before who had a document that was given to him by somebody involved in a legal transaction and there was a spot where there's supposed to be a number written there's no number written there and it was extremely vital to the case extremely about the case and so my client had one of the carbon copies that was you know one of those five part carbons in the old days you know one's golden rod one's canary uh one's salmon one's red and he's got the one and uh take the deposition of the guy who's one of the signatories in that contract and at deposition he hands over i ask him to bring all documents he hands over a document where that number's filled in he just filled it in later and i'm looking at his attorney going like you're going to let your client put that in like that that don't you want to talk to him to explain to him that there's no way my client got the carbon with that number that's not there and your guy just happens to have one that is there like what's he going to say because my client signed it he signed it and he hands a piece of paper over obviously he filled it in later i mean if you're allowed to amend contracts at will after the fact unilaterally contract law falls apart you know so that that's not what happened here i'm simply pointing out that one of the reasons you get a copy of a document is to prove what you signed and so the idea that oh by the way when we gave them it's not official interesting argument but not a good one so i got to thank everyone who sent it karen dave uh ronald joshua denny kenneth keith caleb lyle joe john jerry jason jerry look at all those jays mark and matthew thanks a lot fox 13 published it adam herbert's wrote it salt lake city fox 13 fox 13 investigation prompts utah to look into potential fraud general rv questions or comments put them below those talk to you later bye-bye thank you for watching lato's law force of habit or routine can blind us to the wonders of the world around us

Channel: Steve Lehto

Views: 109,513

Rating: 4.9664001 out of 5

Keywords: lemon law, michigan lemon law, lemon law attorney, lemon law lawyer, http://www.lehtoslaw.com, steve lehto

Id: d8s2dnbYaWo

Length: 21min 5sec (1265 seconds)

Published: Wed May 05 2021