“Fraudulent marketing schemes change over time, but they share one thing in common: they all involve the use of deceptive or unfair practices to separate consumers from their money,” Robert Pitofsky told Congress in 1998 when he was then Chairman of the Federal Trade Commission. A full transcript of his testimony is available here.

There are many variations on this theme, sometimes called “business opportunity fraud.”  Some of these schemes promise to provide leads to seniors who need home care facilities or tenants for group homes. The landlord must make an up-front payment of about $500 for “membership” on a list, a list which may in fact exist nowhere but the bottom of a virtual filing drawer. Leads never materialize.  Promoters just rake in the “membership” fees.

Others are pyramid sales schemes, in which the target must sign up friends to become sales “associates,” those must find others, and on and on.  So-called “endless chain” schemes are illegal. They not only violate California’s Business & Professions Code and other consumer protection laws, but criminal statutes as well. The prospect may have to contribute more money to the promoter at each level just to stay in the game. This “pay-to-play” feature is particularly insidious, because the scheme hooks people who can least afford it and would never get started if they knew the total cost.

Referring to companies that pitch home-based business opportunities, the Fresno Bee recently quoted current Federal Trade Commission Chairman David Vladeck saying, “Virtually all of them are scams.”

Unsuspecting targets are lured with self-help standards like, “Whatever you can conceive, you can achieve,” or “Have faith in prosperity.”  Con artists take cruel advantage of the power of positive thinking just to make a fast buck for themselves.

California laws protect consumers against these scams. For example, certain seller-assisted marketing plans are required to file with the Attorney General’s Office, and in many cases there is a 3-day right of cancellation. Over the years, the California AG has investigated pyramid sales schemes for inventory as diverse as cleaning products and lingerie. The FTC and AG have recently taken an admirably aggressive stand against these bogus business opportunity scams. But the job is simply too big for cash-strapped government to handle alone. Many of these deceptive practices can be challenged through private lawsuits.  If you have been cheated by this sort of thing, contact us.

The recall notice should identify the affected vehicles, name the defective component or condition, explain the consequence of the defect (e.g., crash, stall, etc.) and announce the proposed fix. The notice should also have a recall “campaign”  number issued by the National Highway Traffic Safety Administration’s Office of Defects Investigation (ODI). The NHTSA Campaign number is an important piece of information. Keep the notice in a safe place. If you want more information, visit the NHTSA website.

What if you heard about a recall in the news, but you didn’t get a notice in the mail?  This could be due to a variety of things, most commonly a move or a change of ownership. A safety recall may occur later than the warranty expiration date, so the manufacturer may not have the most up-to-date information.  If you do not have the recall notice, search the NHTSA website for repair information by make, model and year of your car or truck.  Download and print out the reach results, and use that as a notice when you make your appointment. You can also contact the ODI hotline at 1-888-327-4236.

You usually do not have to contact a lawyer about a recall. The manufacturer is already offering a free repair.  However, if you have been in an accident or have taken the vehicle in for repair of that defect on previous occasions, only to be told there was “no problem found” or the condition you complained of was “driver error,” you may have a good warranty or other product defect claim. Then you need good legal advice.  The California lemon law requires the consumer to give the manufacturer a reasonable opportunity to repair the vehicle through its authorized repair shops. What is “reasonable” often depends on the circumstances.  Recall investigations can provide information that was hidden before.  And, if the recall remedy does not fix the problem on a widespread basis, the botched recall may give rise to a class action lawsuit.

Most importantly, do not ignore a safety recall notice. NHTSA does not issue these things lightly, and manufacturers sometimes take pains to prevent an expensive recall campaign. Toyota is in the hot seat now, but it is not the first car maker alleged to have influenced NHTSA investigations. If you get a recall notice, assume there is a good reason for it and set up your repair appointment without delay.

Toyota has expanded the scope of its recall and recently announced another “fix”, but whether it has actually solved the problem remains to be seen. Meanwhile, Toyota and Lexus cars on the highways may have a sudden acceleration problem that has yet to happen. It can be an intermittent condition that lies hidden for months or years after purchase. It might even happen for the first time when the vehicle warranty has expired.  Dealers often downplay the issue, suggesting deceptively that the event was “driver error.” Toyota will have a hard time making that excuse anymore. Congress has opened an investigation.  House Energy and Commerce Committee chairman Henry Waxman says, “Like many consumers, I am concerned by the seriousness and scope of Toyota’s recent recall announcements.” He has demanded more information from Toyota as well as  NHTSA.

If you have experienced sudden acceleration in a Lexus or Toyota, contact KBKlegal.

Unfortunately, the vehicle is often not the only thing taken. The suddenness and stealth of the repo process leaves the borrower unprepared for loss of the personal items many people normally just leave locked inside.  What about that laptop lying on the back seat? Your special baseball glove or soccer uniform? Your baby’s security blanket?  One of our clients lost her family Bible that she always kept in the glove box.  All too many of us keep important vehicle documents tucked in the owner’s manual: purchase contract, window sticker, repair history. And what about that wad you stuff in the console just in case you can’t get to an ATM?  Limit that cache of cash to parking meter change. Other than the DMV-required registration and insurance card, anything that could be the source of identity theft should be kept safe in the house.  And then there are the kids…

The taking doesn’t have to be at night to become a nightmare. Last year  a couple in Texas had momentarily left their two children sound asleep in their car seats, while they took some items into the house.  The speedy repo man didn’t notice the car seats were occupied until he was well down the road, with the frantic parents in panicked pursuit.  Just last month the San Jose Mercury News reported Isabel Luevano’s horror  when her car, with 2 year old son Cyrus still in it, disappeared from the driveway. Only 17 days late on her payment, she thought her Honda had been stolen and her son kidnapped.  A police helicopter search ensued. It’s a day Isabel Luevano will not soon forget.

The repossessor is supposed to secure personal effects and return them on request, sometimes with storage fees.  But a lot of things get lost in the process, and you will have to prove what was inside.  In certain circumstances, there are legal claims that can be made to recover lost property, but prevention is something we always advise.

Take a moment now to consider: What do I leave in my car that I really can’t afford to lose? What would I leave in my car if I couldn’t lock the trunk or door?  Take it out of your car or truck now. With your children safe in their beds, you’ll sleep better tonight.