Antitrust Law Daily Wrap Up, CONSUMER PROTECTION—SDFla: FTC Used Car Rule Violation Would Be Per Se Violation of Florida Deceptive and Unfair Trade Practices Act, (Jan 11, 2013)

By William Zale, J.D.

An automobile dealer’s alleged sham buy back transaction in violation of the FTC Used Car Rule would constitute a per se violation of the Florida Deceptive and Unfair Trade Practices Act (FDUTPA), the federal district court in Ft. Pierce has ruled (Williams v. Delray Auto Mall, January 4, 2013, Graham, D.). The dispute related to a Purchase and Finance Agreement entered into by a borrower who sought to obtain a loan using her 2009 Jaguar XF as collateral.

Despite the fact that the borrower financed $19,880.24, she only received a $4,300.00 loan. She argued that the dealer and a finance company falsely represented that the dealer had received a $7,000.00 down payment and that the defendants, through the sham buy back transaction, charged or attempted to charge approximately $10,000.00 interest in the inflated cash price set forth in the Purchase and Finance Agreement. The borrower asserted that this $10,000 was a hidden charge in excess of what was disclosed to her.

The FDUTPA declares unlawful any method of unfair competition, unconscionable acts or practices, and unfair or deceptive acts or practices. In order to claim a “traditional'' FDUTPA violation, a plaintiff must establish a deceptive act or unfair practice; causation; and actual damages. A per se violation of the FDUTPA occurs when the transgression stems from any law, statute, rule, regulation, or ordinance which proscribes unfair methods of competition or unfair, deceptive, or unconscionable acts or practices, the court observed.

The borrower stated claims for both traditional and per se violations of the FDUTPA , the court held. The defendants allegedly violated both the FTC Trade Regulation Rule Concerning Sales of Used Motor Vehicles (16 CFR 455, CCH Trade Regulation Reporter ¶38,042) and the FDUTPA motor vehicle provisions.

The defendants’ motion to dismiss the FDUTPA claim was denied.

The case is No. 12-cv-14291-GRAHAM/LYNCH.

Robert William Murphy (Law Offices of Robert W. Murphy) for Monique L. Williams. Robyn Lynn Sztyndor (Robyn Lynn Sztyndor, P.A.) for Delray Auto Mall, Inc.

Cases: ConsumerProtection FederalTradeCommissionNews StateUnfairTradePractices FloridaNews