November 15, 2010

Windshield Wiper Defects Are A Winter Safety Hazard

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The California lemon law covers defects that impair the use, value or safety of a vehicle. This is called the “substantial impairment” rule. Only truly trivial matters fall outside the scope of the lemon law.

To our surprise, some manufacturers try to tell car owners that defective windshield wipers are not worth worrying about and that a failure to fix them is not covered under the lemon law. Nothing could be further from the truth. Are they confusing “little” with “trivial?” If you live anywhere but the Atacama Desert, windshield wipers are among the most important safety devices on any passenger vehicle.

Just as November weather is upon us, the National Highway Traffic Safety Administration has issued a recall of Chrysler Jeep 2008 model SUVs for defective windshield wiper motors. NHTSA Campaign ID Number : 10V550 If you get this notice, respond right away.

The windshield wiper was first patented by a female inventor named Mary Anderson. During a winter visit to New York City in 1902, she noticed that the trolley car operator drove with the front window open because of difficulty keeping the windshield clear of blinding sleet. Bundling her own overcoat more tightly, she thought of a mechanism to control the blade from inside of the trolley and keep the draught out. She had a model made of her design and patented it shortly thereafter. In those days a patent was good for just 17 years, and the auto industry took it up as soon as it expired.

Most automobiles use two synchronized radial type arms, while some SUVs and station wagons use one pantograph arm. The intermittent windshield wiper was invented by Bob Kearns. His battle with Ford Motor Company was chronicled in the award-winning movie, “Flash of Genius.”

Although there is a range of acceptable design, properly functioning windshield wipers are standard safety features on passenger vehicles. Don’t let any car dealer tell you otherwise.

November 3, 2010

Honda Civic Tires Wearing Too Quickly - Where the Rubber Meets the Road

civic%20tire.jpg Kemnitzer Barron & Krieg is hearing complaints that Honda Civic tires wear out prematurely. According to reports, the rear suspension was improperly designed in the 2006 and 2007 model year Honda Civics, so that when the vehicle is weighted down the tires end up curving inward, rather than remaining level as they should. This inward curve may cause the tires to wear out far more quickly then they should, as pressure is applied to the tires at an improper angle. In 2008 Honda issued a bulletin to its authorized Honda dealerships regarding this problem. The bulletin allowed dealers to replace the badly designed suspension part at Honda’s cost, and grant buyers a credit toward a new set of tires, the amount of which depended on the amount of use the tires received. However, thousands of Civic owners had already replaced these tires at their own cost and paid for alignments that they did not need, but mechanics had recommended. The unneeded service was recommended because the mechanics did not know the real cause of the premature tire wear. If you are a Civic owner who had to replace your tires early at your own cost please give us a call. This Honda Civic tire problem proves the importance of the phrase “where the rubber meets the road,” both literally and figuratively. Literally in the sense that the improper location where the rubber of the tires contacts the road has resulted in serious problems, and figuratively, because in this moment of truth thousands of 2006 and 2007 Civic owners will likely realize they have spent thousands of dollars because of a manufacturer defect.

October 26, 2010

BMW Stalls In Traffic; Ultimate Driving Machine, or Ultimate Nightmare?

dinan-5-series_1500x1000.jpg Kemnitzer Barron & Krieg attorneys are working on cases for clients with BMWs that have shut off in traffic. Investigation shows the following model BMWs may be subject to the defect that has caused our clients cars to stall: BMW 135i, 335i, 335xi, 535i, 535xi, X5 sdrive35i, X6 sdrive35i, Z4 sdrive35i. It appears to involve essentially all models with BMW’s 300hp twin turbo engine. The fuel pumps in the cars suffering from this defect cannot pressurize the fuel reliably at the pressure required for the twin turbos. Once the pump fails, the engine does not get the amount of fuel required and the car loses power. At best the affected cars will take extra time to start and run roughly, sometimes the cars will run with limited power, while at worst they shut off suddenly. We have reports of these BMWs stalling suddenly at high speeds, even at 70 mph on a Los Angeles freeway. Imagine: the car shakes violently and then loses all power. When a car loses all power it soon thereafter loses power steering, and hydraulic brake assist. This can make the car difficult to stop and difficult to maneuver. Crashes have been reported to the NHTSA as resulting from the fuel pump failure in these BMWs. BMW in its own report to the National Highway Transportation Agency noted that it was aware of the problem back in 2008. BMW has only now issued a recall on all the affected cars, even though it noted in its report to NHTSA in 2008 that loss of all power could occur as a result of the fuel pump failure and that the steering and braking of the affected car would be compromised. If you own one of these cars, take care to look for the early indications of a possible failure. If the car takes longer to start then it has in the past, the check engine light comes on, or the car is running roughly, go immediately to your warranty repair center. If this problem has been worked on and reoccurred, you may have a claim to have your car repurchased by BMW under California’s lemon law, the Song-Beverly Act. Just because a recall has been issued does not mean that the Lemon Law does not apply, especially if BMW has had a number of attempts to solve the problem and been unable to do so. Regardless of what you do, ignoring the problem will not make it go away, and may lead to the ultimate nightmare.


July 12, 2010

Elizabeth Warren: A Common Touch and Perfect Sense

Now that financial reform legislation is headed for the final stretch of congressional debate, ordinary Americans are wondering, "What does it mean for me?"

The best place to get an answer to that fundamental question is to ask Elizabeth Warren, the Harvard Law School professor who has been a powerful voice for consumers on the front lines of the financial reform effort, landing on the front page of Time Magazine, and numerous other publications, in the process. elizabeth-warren.jpgHer common sense defense of American families and the middle class, as well as her ability to explain what is happening, makes perfect sense.

On July 2, 2010, Warren issued a statement, explaining her view of the new Consumer Financial Protection Bureau, which she herself had a strong role in forming. "They created a strong, independent consumer agency that will have the tools to rein in industry tricks and traps and to cut out the fine print. For the first time, there will be a financial regulator in Washington watching out for families instead of banks."

Elizabeth Warren's name is on the short list of President Obama's nominees to lead that new agency. He could hardly find a more qualified candidate, with a common touch and perfect sense.

In an interview that appears in today's Huffington Post online, Professor Warren talks about the difficulty consumers have in making informed credit choices, "Today, the big banks churn out page after page of incomprehensible fine print to obscure the cost and risks of checking accounts, credit cards, mortgages and other financial products. The result is that consumers can't make direct product comparisons, markets aren't competitive, and costs are higher."

On the relationship between financial reform and our economic future, she adds, "If the playing field is leveled and the broken market fixed, a lot more money will stay in the pockets of millions of hard-working families. That's real stimulus -- money to families, without increasing our national debt." For the full text of the HuffPost interview, and to learn where financial reform stands today, click here.

July 10, 2010

Many Suitors for Tesla Motors Technology

Tesla Motors’ dance card is filling up fast. Tesla announced last May that it will make music with Toyota in producing all-electric vehicles at the dormant NUMMI plant in Freemont, California (see “Toyota Closes NUMMI Plant in California,“ posted on this blog April 1, 2010). The new high-tech facility at the site of the old NUMMI plant will be renamed The Tesla Factory. tesla-model-s-sedan_100227083_l.jpg It is there that the two companies intend to produce the Tesla Model S, its first sedan. The Tesla-Toyota union is moving ahead quickly, with the delivery of two prototype electric vehicles as early as this month. The Model S is expected to hit the market in 2012.

Tesla Motors stepped back into the spotlight with an IPO on June 29, 2010. The initial public offering of stock has been hailed as a success for the company, in spite of the market’s general rollercoaster performance last spring. After ending its first day with a sharp spike of $23.89, the stock (TSLA) has settled down and is now trading at $17.40, just above the initial public offering price of $17.00.

Meanwhile, lest we think that Tesla and Toyota are going steady, the media reports that Tesla is whispering with Daimler as well. “Tesla is also working with Germany's Daimler AG on electric vehicles and has supplied battery packs for use in Daimler's Smart minicars. Daimler has also invested at least $50 million in Tesla,” according to the trade publication Automotive News.

Coy, competitive and trendy, tiny Tesla is making some big moves with more than one dance partner. No one should be surprised at a company whose tag line is “Declare Independence.” But who ever thought batteries could be so sexy? For the company website click here.

June 25, 2010

Department of Insurance Slams Consumer Direct Warranty Services for Unlicensed Sale of Insurance

Dilbert taps into consumer frustration with the comic strip posted below. Call it wry humor. But the California Department of Insurance doesn't think consumer fraud is funny. Whether they are referred to as "service contracts," "extended warranties" or "mechanical breakdown insurance," vehicle repair agreements are a big profit center for new and used car dealers. Telemarketers or internet schemes may tout them as well. Often such contracts are unnecessary. Even illusory. Some of these products are legal, but many are not. In the midst of a slick sales pitch, almost no one reads the prolix printed warranty form. That is a mistake Dilbert's "confusopoly consultant" wants you to make. Now the Department of Insurance is clamping down.

For many years, car dealers have claimed that these after-market products do not qualify as insurance and they do not have to be licensed to sell them. That may change. On June 17, 2010, the California Department of Insurance issued a Cease and Desist order against Consumer Direct Warranty Services and related entities. You can read the Department's full press release here.

Some dealer service contracts fall within an exception to the insurance rules. However, in order to exploit that loophole, car dealers must follow certain procedures, have back-up insurance, provide cancellation rights and comply with other regulations.

"If you want to sell insurance in California, you must obtain a license, have adequate financial reserves and you must not deceive consumers," said Commissioner Poizner. "In order to protect California consumers, there are specific requirements for insurance companies seeking to do business in California. If companies do not abide by these requirements, they will not be permitted to sell insurance in our state."

The Insurance commissioner's website goes a step further to promote consumer protection. Check out its "Guide to Auto Service Contracts and Agreements" here. If you have purchased a service contract or extended warranty that does not comply with these rules, contact us even before your car breaks down.

June 24, 2010

NCLC Consumer Resources

nclc_logo.jpg The National Consumer Law Center just launched a new website. Check it out here. The nonprofit center, headquartered in Boston, has been a premier source of assistance for consumers, legal services and consumer lawyers for decades.

Its new website provides information on NCLC's recent reports, numerous publications and current initiatives. Among other things, NCLC publishes reports on scams and predatory trends in consumer transactions, manuals and treatises on a wide variety of legal topics affecting consumers, as well as other books for lawyers and the public alike.Return%20to%20Sender.JPG NCLC is the publisher of "Return to Sender - Getting a Replacement for Your Lemon Car" by Nancy Barron.

In addition to its publications, NCLC funds research, legal conferences and consumer education programs on a wide range of important consumer topics -- from automotive fraud and warranty law, to financial abuse of the elderly, energy policy, student loans, and predatory lending.

Kemnitzer, Barron & Krieg is actively involved in the work of NCLC. Bryan Kemnitzer is a member of the partner's council and Nancy Barron currently serves on its board of directors.

June 11, 2010

Car Dealers Fear Financial Reform

Finance reform has been bumped from front page news by international incidents and the catastrophic BP oil spill. But even as public attention has shifted elsewhere, the National Automobile Dealers Association (NADA) has not lost its focus on Washington. They are lobbying hard against legislation aimed at improving consumer protection. Why?

sleazy-salesman-thumb.jpgThe landmark financial reform package that is working its way through Congress would greatly improve financial oversight of lenders. This means a wide variety of entities who share in the business of lending money, not just banks. After the House and Senate passed different versions of the bills, lawmakers from both bodies are in the process of reconciling the two versions. The battle is drawn, because the House passed a bill that exempted car dealers from financial reform, but a similar amendment failed in the Senate.

The outcome of this process will greatly affect the way cars are sold in coming years. NADA is lobbying for its car dealers to be exempt from financial regulation, and is trying hard to persuade committee members that dealers don't get involved in car loans. Nothing could be further from the truth. As Paul Wiseman of USA Today reports, "auto dealerships originate 79% of auto loans and leases." He goes on to quote the non-partisan Cambridge Winter Center for Financial Institutions Policy as concluding "that auto finance is demonstrably susceptible to unfair and deceptive practices." You can read USA Today's article here.

The argument made by car dealers that they are all small mom & pop shops is also far-fetched. While many are indeed locally owned, thousands of dealerships are controlled by mega-dealers like AutoNation whose 100+ stores have reportedly sold more than 7,000,000 cars. These multi-state conglomerates keep a short leash on customer finance through their tightly controlled on site dealer finance departments and preferred lender programs which direct dealer-arranged financing to a handful of financial institutions.

Just this week, the trade publication, Automotive News reported NADA to be particularly concerned that the proposed consumer financial protection agency would have scrutiny over sale of service contracts and aftermarket items. As we have often discussed on this blog (click on "Shopping for Car Loans") regulation of dealer finance departments is long overdue.

June 10, 2010

Vehicle Self Storage Is Not Always Safe and Secure

Many self storage facilities advertise long term garage space. Beware: this is a risky business for consumers. Storage companies often buy up properties in marginal neighborhoods on freeway frontage or on the fringe of town, where warehouse space is dirt cheap - but not always safe and not always secure.

Advertisements tout security, safety and trust. That trust may be misplaced. At the time of the space rental, storage tenants are often told they need separate insurance for their goods. That should not mean you have to buy it from them, with no opportunity to negotiate. If you are tempted to buy insurance onsite, check with your usual insurance company first. If the vehicle is stored for an extended period of time, the car may qualify for reduced registration as a "non-opp". The Form for a non-operational vehicle can be downloaded from the Department of Motor Vehicles here While you should keep the car insured for theft, be aware that insurance for garaged vehicles not being driven is very low. Your usual carrier will probably give you a discount.

secure.vehicle.storage.antique.car.storage_N.J.jpgWith summer just around the corner and masses of Californians – especially students – on the move, many car owners find they need long term storage for a car or truck. If you are in this category, think it through. Will storage costs of an old car exceed depreciation over the rental term? It might be best just to sell the car now, and buy another used car when you return. Do not expect to be able to just park it on the street. Whether you are in the city or suburbs, most communities have a local ordinance limiting parking to 24-72 hours or by permit only. The best thing, of course, is to find a friend with an empty carport or a three-car garage. Good luck with that! More commonly, you may have to find long-term vehicle storage for a price. The E-How website has some good advice for storing vehicles, including the selection of a dry facility, adding a fuel-stabilizing additive to the gas tank, jacking the body up to relieve weight on tires, washing and covering the car. Further details can be read here.

We also advise that you remove all valuables from the car, even though it is in a locked space. This includes all information concerning the vehicle, like the owner’s manual, purchase documents and warranty history. Never keep the title with the car. Remove even the registration and insurance papers you would normally keep with you when driving. And of course, do not leave a set of keys in the vehicle. Self storage units are notorious for their high burglary rate, and although you hope the car will be secure, don’t take any chances with things you can easily remove.


May 30, 2010

Ford Motor Company May Drop Mercury Brand

A classic car is about to get even more rare. Remember the 1970 Mercury Cougar - a true icon of 20th century American highways? Who would have thought Ford would even consider dropping the brand? Yet, that was the buzz throughout the auto industry last week. From Automotive News to Consumer's Union, sources were reporting that Ford management will consider the proposal this summer as a belt-tightening measure.
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The demise of Mercury will mean the end of an era for Ford. From one perspective, it seems like an odd time to make the cut. Mercury was created during the Great Depression as a mid-priced alternative to the more luxurious Lincoln models.

Mercury later developed the now-classic 60's and 70's designs of the Cougar brand. The Cougar GTE was the epitome of a real "muscle car." To this day, devotees roll up their T-shirt sleeves when cruising in those classics. But muscle cars and other "manly" vehicles just don't sell like they used to, as GM learned when it decided to close down Hummer this year.

The numbers only tell part of the story, but it is the part that Ford executives will be listening to come July. Apparently Mercury's U.S. sales took a slow motion dive from more than 500,000 units in 1978 to less than 100,000 units in 2009. That's a free-fall of more than 75%.

Nonetheless, dropping Mercury is not an obvious choice. We at Kemnitzer, Barron & Krieg share the view of consumer advocate and Ohio lemon lawyer Ron Burdge, who notes that there are less reliable vehicles left in the market. Yellow might be a popular color for Cougars, but there are worse lemons in all colors out there on the road.


May 10, 2010

Infiniti Safety Recall for Airbags

Airbags in a car are like the lifeboat on a small vessel. You don’t need them often, but you do need to know that they will work in an emergency. The problem is there is no easy way to test them out, because once deployed they must be professionally repacked.

Several years ago, a man and his wife came into our office. They had purchased a truck advertised to have driver’s and passenger’s side airbags. When their grandchildren came to visit, they looked for a switch (sometimes called a PSIR) that can suppress the airbag when children are present in the front seat. airbag.jpgThere was no suppression switch. Why? Because there were no airbags! Somehow, the manufacturer had engineered the vehicle in just such a way that the airbag did not fit on the passenger side. Oooops. The manufacturer (in that case GM) later argued that it “forgot” to tell the buyers they had left the airbags out. The vehicle could not be modified to add the airbags later. We filed a class action and, in the end, the owners of thousands of vehicles were entitled to rescind and return their trucks.

Learning that the advertised airbags were missing was like tossing a packed lifeboat into the water only to watch it sink instead of float and deploy. Even with airbags in vehicles, it is wise (and required under California law) to buckle up as well for the best protection in a crash. While they should not be relied on in place of seatbelts, properly manufactured airbags do save lives.

The Center for Auto Safety deserves credit for being an early proponent of airbags, and remains a good source of information concerning the variations in safety records of different brands. Nissan has been no stranger to problems in its sudden restraint systems over the years. For that reason, it was not a total surprise today when NHTSA announced a Nissan recall for nondeployment of passenger airbags in 2005-2007 Infiniti cars. See NHTSA Campaign ID Number 10V175.

May 3, 2010

Toyota's Problems Continue

The National Highway Traffic Safety Administration reported today that Toyota is recalling certain 2003 Sequoia SUVs for a problem in the vehicle stability control system. Should the problem occur, the Sequoia "may not accelerate as quickly as the driver expects,increasing the risk of a crash." You can read the full recall notice here. The Sequoia was Toyota's first full-size SUV, coming out in 2001. Throughout the model lifetime, it has been marketed for families with children and carpool purposes, so even a remote or minor safety concern has serious implications for family use. The model has gone through a lot of changes since 2001, and for that matter since 2003. For the time being, this notice is limited to the 2003 model year.

Like other recalls, this announcement comes from the Office of Defects Investigation (ODI), a department within the National Highway Traffic Safety Administration (NHTSA). ODI conducts defect investigations and administers safety recalls to support the NHTSA’s mission to improve safety on the nation's highways. ODI also reports on and monitors the adequacy of manufacturers' own voluntary recall campaigns.
safercarlogo.gifToyota states that it will notify owners. However, most of the affected vehicles are otherwise out of warranty and may have changed ownership several times. For that reason, Toyota may not be able to notify new owners directly. If this applies to you, call the Toyota hotline at 800-331-4331 or go to the NHTSA sponsored website at http://www.safercar.gov.