Q: What are the legal options I can take against a previous auto dealership that provided in-house financing?
In Sept 2019, I hit a deer. By Nov 2019, an auto claims adjuster came to the house, assessed the damage, and considered it to be a total loss. After the company received the amount to pay off the majority of the loan, which was to be $4995, the dealer's gap insurance that is required at the dealership to make a purchase should have been paid in full. After several weeks, I received rude and threatening calls about returning the vehicle. It was to be reported that I was behind on my payments. I was confused and angry. I drove the car to the lot, handed a gentleman inside the key, and left attempts were made to talk to my adjuster, but during that time frame, I was beyond stressed. I discovered the dealer filed a 1099-c for $3402 against the already paid-off debt. filed it on 3/2020, also placing the negative information on my credit report and stating that the car was reposed but paid off after repossession. I never received notice of the sale of the car or the 1099-c
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A:
You have several legal options to consider in this situation. First, you may want to dispute the 1099-C with the IRS, as it seems the debt was already paid off, and the filing may have been incorrect. If the dealership's gap insurance was supposed to cover the remaining balance, and they did not apply it correctly, you could have grounds to challenge this with both the dealership and your credit report.
Additionally, you could file a complaint with the Consumer Financial Protection Bureau (CFPB) regarding the dealership's actions, particularly their handling of the insurance and the subsequent reporting to credit agencies. It’s also advisable to check with your state’s attorney general or a local consumer protection agency to see if the dealership violated any state laws.
Lastly, you might consider taking legal action against the dealership for any damages caused by their mishandling of the situation, including the impact on your credit report. Keep detailed records of all communications and any documentation related to the incident, as this will be important if you decide to pursue legal recourse.
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