A common auto fraud scheme that we see was dubbed “the Wizard of Oz warranty scam” when we first heard about it.
This is a variety of a fraud and violation of the Truth in Lending Act where the dealer charges the consumer for a warranty that appears on the retail installment contract. However, the dealer simply pockets the cost of the warranty and never actually purchases the warranty or service contract.
If you need to use the #Warranty, it’s not actually there. In fact, you never had a warranty it was an illusion the whole time.
The good news is that the Truth in Lending Act is a powerful statute that allows for the car recovery of attorneys fees by a prevailing plaintiff. The statute also allows for statutory damages.
Unfortunately,the Truth in Lending Act (besides being a fairly complicated piece of federal legislation) has an astonishingly short one year statute of limitations. This means that if you don’t sue within one year of the violation, you lose your right to sue under this powerful piece of legislation.
