Sep 12 2008
The Deferred Down Payment Scam
Many customers are unable to pay the entire down payment at the time the purchase contract is signed. Dealerships will allow customers to make down payments in payments (called deferred down payments). The code recognizes these types of payments and requires that deferred down payments be itemized, including the amount and date due for the deferred down payments. However, rather than disclosing deferred down payments are required by the code, dealerships will have customers write checks for the deferred down payments and then agree not the deposit the checks until an agreed upon date. As part of this transaction, customers are made to sign a hold check agreements that states what date the checks will be cashed and also have additional provisions regarding any returned checks, thus creating obligations that are not included in the single document (purchase agreement.)
