AG Gansler Secures Settlement from Jones Junction Auto Group
Consumers' lost right to defend themselves, had cars improperly repossessed
Baltimore, MD (June 16, 2014) - Attorney General Douglas F. Gansler announced today that his Consumer Protection Division has secured a settlement from the operators and management companies of six Harford County vehicle dealerships over allegations that they forced consumers to waive their right to a legal defense if they defaulted on their financing agreements.
"One of the core tenets of our justice system is an individual's right to defend themselves in court before a judgment is entered against them," said Attorney General Gansler. "The sales contracts consumers were made to sign at these dealerships took away that right, potentially leaving them on the hook for thousands of dollars before they had the opportunity to tell their side of the story."
According to the settlement, consumers who purchased vehicles at six car dealers in Bel Air -- Jones Junction, LLC, t/a Jones Toyota/Scion; Jones Automotive, LLC, t/a Jones Chrysler/Jeep/Dodge; Bel Air Nissan; BAN Motors, LLC, t/a Bel Air Hyundai; BAN Automotive, LLC, t/a Bel Air Subaru; and Jones Bel Air Motors, t/a/ Jones Kia, collectively known as Jones Junction Auto Group – were told to sign confessed judgment notes in which they promised to pay all or a portion of their vehicles by a certain date, and if they failed to do so would automatically forfeit their right to defend themselves.
Under state law, it is an unfair or deceptive trade practice to use a contract that contains a confessed judgment clause waiving a consumer's right to assert a legal defense to an action.
The Division also alleged that consumers who defaulted on their financing agreements had their vehicles repossessed without being provided proper notice, rights to redeem the vehicle or any liability that still might be owed even after a repossessed vehicle is then resold, in violation of the Maryland Consumer Protection Act.
The settlement prevents any of the aforementioned dealers from using or enforcing a confessed judgment clause in a contract, forces them to dismiss any pending legal actions filed against consumers to enforce any confessed judgment notes, and prohibits them from repossessing any vehicle until they comply with the laws involving vehicle repossession. It also requires the dealers to mark as satisfied any judgments obtained against consumers that were based on a confessed judgment and requires the dealerships to inform the three major credit reporting agencies that each judgment or illegally repossessed vehicle was erroneously entered and that any negative information resulting from that should be stricken from the consumer's credit records.
The settlement also requires Jones Junction to pay restitution to consumers equal to amounts that they were illegally forced to pay. Jones Junction must also pay $115,000 in penalties and costs to the Division (which may be reduced to $50,000 if Jones Junction complies with all settlement terms).