Tate's Auto keeps coming up at auto sales hearings
By Alastair Lee Bitsoi
CROWNPOINT, January 10, 2013
Johnson had been enjoying his new ride for about three weeks when he got a call from Citi Financial Auto - the company Tate's had already told him had approved his loan. Citi wanted to know if Johnson's co-signer lived with him.
"I said, 'No.' It's the truth," said Johnson, who was one of 18 people to testify at a public hearing on predatory auto sales last Friday at Crownpoint Chapter House.
The meeting at Crownpoint was the third public hearing organized by the Navajo Nation Human Rights Commission to hear from Navajos who feel they've been victimized by predatory sales from border town auto dealers.
"How many times have we heard Tate's Auto? Too many times!" HRC commissioner Steve Darden quipped, before Johnson continued with his testimony. Following his interview with Citi, Johnson said, Tate's called him and told him to return the truck - adding that if he didn't, he would go to jail.
"They started threatening me," Johnson said. Then they told him he would be charged 18 cents per each mile he had put on the truck. It just didn't sound right to Johnson, who immediately canceled the $1,500 check he had put down along with $500 cash.
Johnson dutifully returned the pickup, but not without questioning the employees about their tactics. This earned him a visit with the managers, who rather than try to resolve Johnson's issues, "verbally abused" their young customer, he said.
"You're pissing me off!" Johnson recalled the finance manager telling him. Yet, Johnson said, he was offered another contract for the same vehicle.
Johnson had had enough of Tate's and walked away. But many who have testified at the Human Rights Commission's hearings were not so fortunate, and ended up signing a second or even third contract at a higher interest rate.
HRC commissioner Jennifer Nez Denetdale coined Johnson's story the "yo-yo sales" tactic.
"They allow you to take the vehicle," she said to the 80 people in attendance. "They keep making you come back...with additional demands to pay more."
No one answered the phone at the number listed on the Internet for Tate's three dealerships in Show Low, Ariz., Holbrook and Gallup.
Prior to the public testimony, the Navajo Nation Human Rights Commission and DNA People's Legal Services presented to attendees general information about what to look for in a retail sale contract with an auto dealership.
Leonard Gorman, the commission's executive director, warned potential car buyers to examine all print, including the fine print, in any contract. Gorman specifically pointed out "no cooling off period" and "arbitration clause" terms found in a contract that prevent consumers from returning a vehicle to a dealership and suing in court, respectively.
"These contracts are important for consumers to understand," added Calvin Lee Jr., staff attorney for HRC. "If you're unprepared, you're surrendering all your knowledge."
According to Levon Henry, executive director for DNA People's Legal Services, the second-largest number of complaints filed in DNA offices across the reservation are consumer-related.
"Nothing shocks us because we heard it before," Henry said. "A lot come from Holbrook."
He added that DNA's partnership with the tribal human rights commission helps "to hear the people. It gives us information to take care of these problems."
Of the 3,000 cases DNA closed this past year, about 40 percent of them are consumer-related, Henry said.
The public hearings have also caught the attention of the federal Consumer Protection Bureau, Human Rights Watch and New Mexico Legal Aid, which each had representatives at the meeting.
Because of a policy that prevents her from talking to media, Consumer Financial Protection Bureau representative Eleanor Bloom would only say she attended the meeting to see if auto finance companies - not auto dealerships - are violating consumers' rights.
Bloom seemed interested in the testimony of Serma Hale, 68, who testified against HSBC Finance Corp. Because she could no longer afford paying for her 2004 Ford Focus, Hale decided two years later to return her car to Ed Corley's in Grants, but was told by the dealership the car belonged to the finance company.
Upon hearing that, Hale called the finance company and explained her situation. She said she left the car parked at her house with "no dent," "good condition" and "clean inside" for repossession.
HSBC sold the car for less that Hale owed, and told her she needed to pay $1,700 to make up the difference. She later found out, she said, that the storage company who towed her car damaged it and that was why it had lost so much value.
"We didn't pay to them after that," Hale said, adding she worked with a law firm in Albuquerque to settle with HSBC. "After that we got this letter from the IRS that we need to pay the finance charges and tax. That's $2,500."
"I'm just wondering if that's right or wrong," Hale said. "I didn't know they could do that to you - going to the IRS."
Established by Congress, Bloom said, the CFPB protects consumers by enforcing federal financial consumer laws. She said consumers can submit complaints against an auto finance company at consumerfinance.gov or call 855-411-2372.
Human Rights Watch representative Arvind Ganesan, like Bloom, attended the hearing to document any payday, online and auto title lending.
"I came here today to talk to some of the commissioner members and hear the testimony of people about auto title lending," he said. "Although we haven't heard any auto title lending, I'm trying to also get a sense of issues facing people today."
As part of his work, Ganesan has traveled to the Cheyenne River Sioux, Crow Creek, Acoma, Laguna and the Pottawatomi reservations, among others, to document the issue of auto title lending and find out the impact it has in tribal communities.
"What we learned is that these types of loans are widely used and in certain circumstances can cause real hardship for people because they're very expensive..." he said.
Although he didn't hear testimony about any auto title lending, Ganesan said it doesn't mean it's not an issue.
"Here, nobody has testified on it," he said. "It means that the issues of the people that are here that are more pressing are how they're treated by the auto dealers and finance companies."
Other testimonies ranged from repossessions, electronic lockouts, high interest rates, deceptive marketing tactics like "bait and switch" as well as the "yo-yo sales."
"It is incumbent for our Navajo people to know their rights," Darden said.
Anyone who feels he or she has been victimized by unscrupulous car salesmen may fill out a written complaint with the commission or online at http://www.nnhrc.navajo-nsn.gov/.