Used Car Sales and the Fair Business Practice Act

Does a car dealer’s sale of a used car fall within the scope of the Fair Business Practice Act?

The short answer is yes, “[a] dealer’s sale of a used car falls within the ambit of the FBPA.” Isbell v. Credit Nation Lending Serv., LLC, 319 Ga. App. 19 (2012).

The more complicated question is does a used car salesman who knowingly misrepresents the vehicle’s condition by asserting that it was clean and undamaged violate the Fair Business Practice Act? It depends…

A claim under the FBPA requires that the plaintiff show that the defendant perpetrated a volitional act constituting an unfair or deceptive act or practice conjoined with culpable knowledge of the act’s nature (but not necessarily the illegality). Paulk v. Thomasville Ford Lincoln Mercury, 317 Ga. App. 780, 732 S.E.2d 297 (2012); Tiismann v. Linda Martin Homes Corp., 281 Ga. 137 (2006).

Therefore, “[w]hen the alleged FBPA violation is a misrepresentation, the consumer must show that he exercised due diligence to ascertain the falsity of the statement. Otherwise, the cause of the injury is the consumer’s lack of proper diligence, rather than the alleged FBPA violation.” Tiismann, 281 Ga. at 141(2), 637 S.E.2d 14.

Georgia courts have held that disclaimers and qualifications are not deceptive if they are sufficiently prominent and unambiguous to change the obvious meaning of other unconditional claims and leave an accurate impression.

A contract that merely states that the vehicle is being sold “as is” is not sufficient to overcome a salesman’s false and misleading statements.

But the disclaimers that state that the buyer that he should not rely upon the car salesman’s representations, that the car is listed as having prior damage and that the car dealer recommends that the customer get an independent evaluation of the vehicle before purchasing it may be enough to overcome a salesman’s false and misleading statements. This is because a lack of justifiable reliance bars a claim under the FBPA. Lynas, 216 Ga. App. at 437(3)(b), 454 S.E.2d 570.

One cannot ignore information concerning prior damage and the recommendation for an independent inspection. A car purchaser cannot have “blind reliance on the salesman’s representations when the means of knowledge were at hand, because it shows an unjustifiable lack of due diligence.” Id. See also Lehman v. Keller, 297 Ga. App. 371, 677 S.E.2d 415 (2009) [the customer could not establish the requisite due diligence where they failed to exercise right to inspect property which would have revealed damage allegedly concealed by seller]. Garcia v. Charles Evans BMW, Inc., 222 Ga. App. 121, 473 S.E.2d 588 (1996) [absence of justifiable reliance precludes Fair Business Practice Act claim where contract clearly stated fact as to which buyer claimed he was misled].

As a dealership fraud lawyer, Diwan Law will analyze your case to determine if you were justified in relying on the use car salesperson’s statements to your detriment and whether you have a viable fraud case.

Contact the consumer advocate attorney today for your free consultation.