KIYC: Car recall bill may provide less protection in legal disputes

Posted: Updated:
TRENTON -

A bill that purports to protect consumers from car dealerships that sell recalled vehicles could actually provide consumers with far less protection in legal disputes, a Kane In Your Corner investigation finds. 

The bill, sponsored by Sen. James Beach (D- Cherry Hill) includes a section totally unrelated to recalls, which would reduce buyers’ rights under the New Jersey Consumer Fraud Act. State election records also show the bill was introduced after three years of large contributions from car dealerships to the Senate Majority PAC, including $500,000 from one car dealer alone.

Alexis Rodrigues is the kind of car buyer the bill would appear to help. She thought she was getting a good deal on her 2009 Ford Edge, until she got a recall notice saying the car had defective airbags, and replacements would not be ready until September. “I’m spending money on a vehicle that we can’t use,” she says.

Had the bill been in place, Rodriques would have had to have been informed that the car she was purchasing had an open recall. But there’s something else in the bill that sponsors aren’t so eager to talk about. 

“It’s a double whammy to consumers and a gift to auto dealers,” consumer attorney Michael Galpern says bluntly.

That’s because the bill also makes car dealers exempt from certain parts of the Consumer Fraud Act. While the current law provides for “triple damages” – essentially $3 for every dollar the consumer loses – the new bill would only allow for that in “egregious” cases. It would also limit attorney fees to 30 percent of the amount awarded, which Galpern says would be “economically infeasible” for most attorneys.

A spokesperson for Sen. Beach emailed a statement to Kane In Your Corner, saying “the bill supplements the Consumer Fraud Act” and adding “If you have any other questions about the bill let us know”.

So News 12 New Jersey’s Walt Kane emailed back, to ask: “How does this bill ‘supplement’ the Consumer Fraud Act, rather than weaken it?” He also asked whether the bill “essentially serves as a giveaway to car dealership at consumers’ expense” and whether the legislation was impacted by the large campaign contributions from car dealers.

The spokesperson replied, “You have the statement from the Senator and we have no further comment.”

Alexis Rodrigues is skeptical the bill would even benefit people in her situation, saying lawmakers should simply ban the sale of cars with open recalls instead. “Even if this passes, it's still going to happen,” she says. “They'll just slip it by you and you'll sign it. And it's just going to keep happening.”

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