Aug 13 2008
Auto Fraud Tricks: Single Document Rule
The Automobile Sales Finance Act (AFSA) provides that all obligations of both parties in a transaction must be contained in a single document (which explains why purchase agreements are so long in the auto industry). Often, however, dealerships will have customers sign additional documents, such as trade-in forms stating that the customer agrees to pay any difference between the value of their trade-in vehicle and the amount owed on that vehicle. Or, the dealership will agree to make payments on a trade-in vehicle but not include the trade-in vehicle in the purchase agreement. Another example is a “hold check agreement” whereby the customer agrees to pay additional money towards the down payment on a later date. Each of these documents violates the one document rule.
