Washington, D.C. – A coalition of veterans and service member organizations filed a brief in the US Court of Appeals for the Fifth Circuit today, defending a rule published by the Federal Trade Commission (FTC) that protects people from bait-and-switch, misleading, and other harmful tactics that some car dealers have historically used to take advantage of consumers, including some tactics specifically targeting veterans and military families. 

“We have had clients who come to us after having fallen prey to unscrupulous car dealerships offering predatory loans. These deals can have long term consequences for the veteran or service member beyond paying too much for the car,” said Alison Weir, Executive Director of Connecticut Veterans Legal Center (CVLC) and US Air Force Veteran. “These arrangements can impact not only their credit score, but also their ability to balance other expenses and, if they are suffering from PTSD or other similar disability, their ability to recover.” 

The brief filed highlights the variety of ways unscrupulous car dealers take advantage of service members and veterans, harming military readiness, as well as American military families as a result.  The FTC’s new regulation “Combating Auto Retail Scams Trade Regulation Rule” (CARS Rule) will ban most, if not all, of these practices, protecting all Americans from exploitative practices by some car dealers. That includes scams that specifically target service members, such as when car dealerships misrepresent their affiliation with the military.

“Service members are uniquely vulnerable to unscrupulous car dealers – they are often young or financially inexperienced, they have a guaranteed paycheck, and they are often limited to the area near a military installation with limited time or ability to comparison shop between dealers,” the brief reads. “Too often they fall prey both to scams that specifically target service members—misrepresenting military affiliation or deceiving consumers about the extent of Servicemembers Civil Relief Act protections—as well as to tricks and swindles that harm car buyers generally, such as payment packing or the so-called yo-yo scam.”

Despite the clear need for protections against auto scams, the National Automobile Dealers Association and the Texas Automobile Dealers Association are seeking to block the new protections in court. 

“Special interests are attacking protections necessary to prevent veterans, service members, and their families from being harmed. It is reprehensible that these simple transparency measures and basic protections against fraud are under threat,” said Mark Samburg, Senior Counsel for Democracy Forward who is representing the veterans and service members on the brief. 

The veterans and service member organizations represented on the brief by Democracy Forward include the Military Officers Association of America, the National Military Family Association, Minority Veterans of America, the Chief Warrant and Warrant Officers Association of the U.S. Coast Guard, the Enlisted Association of the National Guard of the United States, and the Connecticut Veterans Legal Center (CVLC).

Read the full brief here and find out more about Democracy Forward at www.democracyforward.org. 

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