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Attorney General for Ohio sues ‘buy here, pay here’ used-car dealers for ‘multiple’ violations
April 20, 2012
Ohio action recalls Sen. Ted W. Lieu’s California bill
SACRAMENTO – Ted W. Lieu of Torrance today released the following statement in response to the Ohio Attorney General suing ‘Buy Here, Pay Here’ car dealers.
“I commend Ohio Attorney General Mike DeWine for suing predatory Buy Here Pay Here used-car dealers,” Lieu said. “His action confirms that these dealers are often unscrupulous and take advantage of desperate consumers through the use of one-sided, blatantly unfair contracts with interests of up to 30 percent.”
At a Buy Here, Pay Here dealership, consumers are victimized by paying outrageous interest rates for cars that often are clunkers. Consumers are then re-victimized if they default on even one payment because the dealership repossesses the vehicle and then re-sells it to the next unsuspecting consumer.
For example, recent investigations showed that a vehicle was sold eight times within weeks.
“My measure, Senate Bill 956, would regulate this unregulated industry.” Lieu said. “SB 956 contains numerous consumer protections, such as capping the interest rate, putting these dealerships under the regulation of the Department of Corporations and subjecting the dealership to the protections of the California Finance Lenders law.
“Buy Here Pay Here dealers are the Wild West of used-car dealerships, and it is time they are brought under control.”
The Ohio action came the day the California Senate Banking and Financial Institutions Committee approved SB 956 during its first policy review.
Last January, two days after Lieu introduced SB 956, the head of the federal agency charged with protecting and overseeing financial services for consumers announced he also was looking into the issue.
Lieu said California consumers who’ve been ripped off by these shady dealers welcome the Consumer Financial Protection Bureau’s investigation into what has become a growing danger to consumers.
“As it now stands, used car dealers offering these ‘buy here, pay here’ loans are exempt from many of the protections that apply to other areas of finance,” he said. “Without these protections, consumers are paying the price – often an exorbitant price.”
To read about the Ohio suits, click HERE:
To read about the federal announcement, click HERE.
To read about Lieu’s bill, click HERE or go to the link below.
SB 956 will next be heard on Tuesday, April 24, 2012 by the Senate Judiciary Committee.
For more, including additional background, visit Lieu’s Web site at the address below or contact Lieu’s office.
Ted W. Lieu chairs the Senate Labor Committee and represents nearly 1 million residents of Senate District 28, which includes the cities of Carson, El Segundo, Hermosa Beach, Lomita, Manhattan Beach, Redondo Beach and Torrance, as well as portions of Long Beach, Los Angeles and San Pedro. For more, visit www.senate.ca.gov/lieu