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Honest 'Car Guys' Need Love , Too, Along With Minimum Wage and Legal Representation


There are honest car guys/gals. The Amlong Firm represents a number of them.

Honest car salespersons - the brunt of jokes about trust, based on the behavior of their less savory colleagues, the target of plaid-suit caricatures stemming from the same stereotype - need love too. And legal protection.

Crooked car dealers, infamous for gypping their customers out of what adds up to literally billions across the nation in fraudulent overcharges, do not hesitate to cheat their sales and back-office (finance and insurance, or "F&I") employees, too, and to fire anyone who resists defrauding customers or financial institutions.

One of The Amlong Firm's clients was mentioned in a front page story in The Miami Herald Sunday, January 25 concerning how dealerships permit sales persons and F&I managers to lie to lenders to get their customers financing that the customers would not otherwise get for cars they often cannot afford. The Amlong Firm has filed suit for him under Florida's private-sector whistle-blower's act, §§ 448.101-109, Florida Statutes, on the grounds that his employer fired him as finance director of a car store when he refused to go along with the submission of credit applications that included phony earnings statements and even a counterfeit income tax return. (How dealership employees cheat the lenders, or lead their customers into doing so, is discussed below in more detail.)

How else do dealerships abuse salespersons?

One way, that is becoming increasingly prevalent in these hard economic times - when fewer persons than perhaps ever before are inclined (or able) to purchase new cars - is to limit salespersons to a "commission- only" pay plan that does not always produce even the federal minimum wage ($6.55 since July 24, 2008), much less the temporarily higher Florida minimum wage ($7.21 since January 1, 2009), for work weeks that in the car business average 55 to 65 hours a week. (As of July 24, 2009, the federal minimum wage will be $7.25-an-hour, higher than the Florida rate.) The Amlong Firm in January 2009 filed suit in United States District Court for 14 sales employees of a large South Florida dealership group, and is seeking to represent all of that dealership group's current and former sales employees to obtain for them minimum wage for any week in the past three years during which their earnings were lower than the law permits. Based on telephone inquiries received since the suit was publicized, The Amlong Firm anticipates filing similar actions against other dealerships. The law is quite clear: while car salesmen are not entitled to overtime, they are entitled to minimum wage - and to the attorney's fees and costs that it takes to get it.

How else to dealerships cheat their sales personnel? Most often by monkeying around with the "gross profit" on each car sold, deducting everything under the sun from the "commissionable gross" on which the salesperson gets paid.

For example, when a dealer charges a customer say $600 for a "pre-delivery inspection," that is a retail price for services that really costs the dealer a small fraction of that in labor and equipment - but the entire $600 is charged "to the deal," which means that it reduces the "gross profit" on which the salesperson's commission is calculated.

Or, when the finance-and-insurance person processing the paperwork on a new car purchase plugs in a charge for "etch" protection against theft (a numerical code that supposedly is inscribed on various windows, etc.), the profit on which the F&I person's commission is based is once again is artificially deflated by charging to the deal the retail price, not the dealer's wholesale cost, for the "etch" - and that is assuming that the car even is really "etched," an assumption that is not necessarily valid.

And God forbid that any salesperson, any F&I person, or even a manager, should decline to send the lender a false income statement or freshly printed-on-demand wage-and-earnings statements that bear no relation to reality. Or that a loan underwriter should question the real value of a "power-booked" used car (one that is listed as having a lot of options that it does not really have to increase the "blue-book" loan value) that some dealership wants to sell to a sub-prime borrower for an exaggerated interest rate - a loan predestined to go south, but one that the bank could until recently nonetheless bundle and sell to an investor.

Sales, F&I and even management personnel who do not go along with these practices (and bank personnel who do not go along with loan fraud) find themselves shunned and, often, fired for not being "team players." Not to mention that they are being cheated out of their pay.

This is not to say that all dealerships treat their sales personnel and F&I managers like this, or allow them to behave this way. A number have stringent internal controls. A substantial number, however, appear not to.

Those unscrupulous dealerships, however, simply cannot get away doing that stuff. Both federal and state laws forbid it - and provide for not only criminal penalties, but also potentially substantial damages and attorney's fees and litigation expenses to those honest car guys/gals who are paid less than minimum wage, cheated out of their pay or fired because they will not go along with fraud.

We at The Amlong Firm, One, have familiarized ourselves with auto fraud and the bank fraud that is associated with it, as well as the dealership accounting systems that allow it to be documented and traced; Two, are acquainted with consumer attorneys such as Rebecca J. Covey, Attorney-at-Law, who familiar with the ins-and-outs of how car dealerships operate; Three, work with respected, court-accepted experts such as David A. Stivers, who has testified in auto-fraud cases for a number of state Attorneys' General offices; and, Four, have sued auto-dealerships both for whistle-blower retaliation and for cheating dealership personnel out of their commissions.

The Amlong Firm's attorneys are licensed in every court in Florida, in the United States Courts of Appeals for the 5th and 11th Circuits (covering respectively Texas, Mississippi and Louisiana and Florida, Georgia and Alabama) and the United States Supreme Court. We also have handled cases in New York, California, Texas and Virginia. We are as comfortable in arbitration as we are in front of a jury - and after the two shareholders' having done roughly 100 jury trials each, we are very comfortable in front of juries.

Helpful hints:

One, before you engage in an real discussions with your employer, and especially before you sign any separation agreement, talk to an experienced labor-and-employment lawyer;

Two, save copies of your pay plans, as well as your pay stubs, weekly schedules, and time records: these have been given to you and are your property;

Three, not only make copies of what you think are suspicious documents, but just in case the dealership or bank attempts to later accuse you of "stealing" documents showing that the bank or dealership was stealing or making what it knew was bad loans, also make a detailed list of the documents and e-mail copies of them to the owner, general manager, or compliance officer, along with a message saying why you believe that the behavior is violating what Florida whistle-blower law refers to as a "law, rule or regulation" - so they cannot say that you never told them and from whom they later can be subpoenaed, which will document that you have complained in writing about the fraudulent behavior.

Four, talk to others who are in the same situation as you and see if they wish to join with you in a joint complaint to the dealership or bank about what is going on - which is as "concerted activity" protected by the National Labor Relations Act and which could result in a multi-employee complaint to the National Labor Relations Board should the dealership not make things right; and Five, be extremely careful about speaking with any "consumer advocate" - these people want you as a witness against dealerships, which may be good for consumer plaintiffs, but potentially can implicate you in behavior that is, frankly, criminal. Unless there is a licensed lawyer present who clearly is representing you, and with whom your conversations are attorney-client privileged, anything you say (for example, to someone who purports to be "representing" or "working with" a lawyer, or who says that he or she can put you in touch with a lawyer) can be used against you in a criminal prosecution;

Six, last, but definitely not least, do not do things on the job of which you would later be ashamed. Stand up to your bosses. If you do something wrong once, don't do it twice. If you have done it twice, do not do it a third time. If... You've got the drift.

There are a thousands of honest car guys/gals. The Amlong Firm's lawyers can help them. And you - if you are one of them. Or a bunch of them.

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