Time to End 'Yo-Yo Sales' and 'Spot Delivery' Car Loans FTC is Told by Michigan Consumer Attorney Ian Lyngklip

SOUTHFIELD, Mich., Nov. 30, 2011 /PRNewswire/ -- The practice of abusing conditional loans by some car dealers is widespread enough that the Federal Trade Commission should enact new regulations to protect consumers.

That was the stance taken by Michigan Consumer Attorney Ian Lyngklip at an FTC sponsored workshop in Washington, D.C., held to explore harm done to consumers when applying for car financing or car lease contracts.

"In no other area of our commerce can someone sign on the dotted line, deliver the product, and then cancel the transaction and insist on the product being returned because the final credit transaction did not produce the hoped-for income," says Lyngklip, a senior member in Lyngklip and Associates, Southfield, Michigan. "It's like I walked into a supermarket, purchased an apple, walked outside and took a bite only to have a clerk run into the parking lot and insist the apple be returned."

The practice of issuing conditional loans, known as spot delivery or yo-yo loans in the car industry, is prevalent enough and harmful enough to warrant FTC protective regulations and enforcement action. "It is unconscionable that a dealer would sell a car and then, because the final credit terms are unfavorable, send the repo man out to repossess the car and refuse to give back the down payment or reimburse for payments made," added Lyngklip.

A spot delivery, or yo-yo sale, happens when the car dealer sells the consumer a vehicle and completes all the steps necessary to sell the car including executing a contract of sale, signing title, taking a down payment and turning over the keys.  After the transaction is finished, the dealer calls the consumer back claiming the deal has fallen through. In some instances the dealer uses fraudulent means or forcible repossession to take the car back.

The November 17, 2011 FTC Roundtable was entitled "The Road Ahead: Selling, Financing & Leasing Motor Vehicles." Lyngklip was one of five experts participating in Panel 4 which discussed "Which Practices, If Any, Cause Significant Harm to Consumers, And What Are Potential Solutions."

"The most severe practice is when police get involved to get the car returned and to seek prosecution when the only crime that has occurred is that the dealer could not make enough money on a spot delivery and didn't want to go through with the deal," Lyngklip said at the workshop. "Less severe but wrong is when the dealer tricks the consumers and offers a free oil change and then grabs the car when the buyer comes in.

"In America, deals are done when they are approved," he concluded. "That's the way we do business." A link to the webcast of the event can be found at: http://www.sue4abuse.com

Lyngklip, who regularly appears as a speaker and panelist at national events, has been named Consumer Advocate of the Year by the National Association of Consumer Advocates and also earned the Frank Kelly Consumer Advocate Award from the Michigan State Bar Association Consumer Law Section.

Lyngklip has been quoted as an expert on consumer law by such national publications as Smart Money Magazine, Wall Street Journal Money Watch, the New York Times, Kiplinger's as well as NPR. He is one of 5% of all lawyers designated as a Super Lawyer and has testified for the Michigan House of Representatives and the Federal Trade Commission (FTC).

About Ian Lyngklip
Ian Lyngklip is an experienced lawyer representing consumers in disputes with debt collectors, car dealers, banks, credit reporting agencies and bad corporate actors. He specializes in representing victims of collection abuse, credit reporting errors, and car dealer fraud. He is senior partner of Lyngklip & Associates Consumer Law Center, PLC which offers free consultations and does not collect a fee unless a recovery is made. Call 877-783-4228 or visit http://www.sue4abuse.com The firm is located at: 24500 Northwestern Highway, Suite 206 Southfield, MI 48075-2406.

Media Contact: Scott Lorenz, Westwind Communications Litigation Public Relations 734-677-2090 http://www.westwindcos.com

SOURCE Ian Lyngklip