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Auto Dealer Insurance Sales Complaint Ready for Filing

04/01/2010

Today’s guest post is by Donna M. McKenna, VP of Communications and Registry Liaison at MAIA.

Comments on this submission are encouraged but we respectfully request that anyone wishing to submit a dealer complaint do so by using our online form or contact Donna McKenna or Kathy Cormier in our office directly at 800-972-9312.

On March 15th, we issued a Flash Bulletin (MAIA Bulletin #2010-6) announcing that Commissioner Joseph G. Murphy had issued a bulletin (DOI Bulletin 2010-6) regarding the involvement of motor vehicle salespeople in the solicitation, negotiation or sale of motor vehicle insurance.

Since then, we have heard from a number of MAIA members indicating “this happened to my client.” Now, it seems, we’ve hit the “motherload”, a complaint with enough “wrongdoing” to warrant filing complaints with four separate state agencies!

Complaint #1: While my client was at the dealership “he was informed that he was required to purchase a new policy through GEICO Insurance before he could take delivery of the vehicle, even though he has an active policy through our Agency with Commerce Insurance Company, and this was to be a transfer of coverage and plates.” The consumer told his independent agent “that the dealer called GEICO and discussed which coverage was to be placed on his policy and at no point did he speak with the carrier himself.” This complaint will be filed with the Division of Insurance since it appears to violate DOI Bulletin 2010-6.

Complaint #2: One of the documents the consumer provided to his agent was a “Buy Here, Pay Here Contract” in which the consumer agrees to pay $100 every two weeks to the dealer. When the vehicle was registered, there was an indication that there was a lienholder, but the lienholder code used was C9999—Lien Exists, Name is Unknown. We can find no evidence that the dealer in question is licensed by the Division of Banks to operate a finance company. This complaint will be filed with the Division of Banks since it appears that the dealer is not licensed under the provisions of MGL c. 255B as a sales finance company.

Complaint #3: After taking delivery of the vehicle, “he was sent to get his inspection sticker from either a relative or friend of the dealer — he couldn’t recall. But he was passed although his vehicle had some obvious safety issues (according to what he had informed me).” The agent, after consulting with two other dealerships, advised the consumer to take his vehicle to another inspection station and ask that the inspection be re-done. While we haven’t heard the outcome of the “do-over,” we will file a complaint with the Inspection Section of the RMV.

Complaint #4: Since there is so much wrong about this deal, we will file a fourth complaint with the Office of the Attorney General.

I wish I had a dime for every time an agent told me his customer had this experience at an auto dealership since we reported on the Commissioner’s Bulletin. I always kid in class about consumers wanting to believe anything the dealer tells them because they envision how they’ll look riding around in that new set of wheels. They should NOT believe that they must buy insurance as part of the auto sale.

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