What is Warranty Fraud?
Warranty is often sold with used vehicles at the time of sale. The dealer must properly disclose what the warranty will cover as well as supply it to the purchaser. Warranty fraud can occur when the contractual agreement is dishonored or when a product or service is not as should be reasonably expected by the purchaser. Also, warranty fraud can occur if the dealer fails to supply the purchaser the warranty that was purchased.
According to the California Business and Professional Code, it is unlawful to advertise a product or service in an untrue or misleading manner. According to the California Legal Remedies Act, it is unlawful to engage in unfair methods of competition and unfair or deceptive acts or practices in a transaction intended to result or which results in the sale or lease of goods or services to any consumer to include advertising goods or services with intent not to sell them as advertised.
In the event that the dealership fails to act in conformity with these laws, the consumer is entitled to remedies to include rescission of the purchase agreement and payment for actual damages, consequential damages, punitive damages, and costs of litigation. In most instances we are able to recover attorneys’ fees as either consequential damages or punitive damages.
Client purchased a 2007 Volkswagen GTI from Defendants. Subsequently, he discovered that manufacturer’s warranty of the subject vehicle had been voided because of extensive after-market parts/accessories. As such, in the event of necessary repairs, the subject vehicle would not be covered under the manufacturer’s warranty. Defendants had failed to disclose this material information to Client at the time of purchase.