Alabama Car Dealerships Class Action Alleges Fraudulent Auto Loans

A class action lawsuit alleges that Serra auto dealerships in Alabama misled customers and submitted fraudulent loan documents for many automobile purchasers.

The complaint contends that it was the common practice of employees at Serra Nissan/Oldsmobile and Serra Volkswagen to make up information on loan documents so customers with low credit would get auto loans, and then they would fraudulently increase the amounts of the loans.

“[C]onsumers thought they were paying for a vehicle, but were unaware they were actually paying to increase the dealerships’ profit margins through unlawful markups, unwanted add-ons, and fraudulently inflated sales prices,” according to the class action.

The Serra automotive dealership class action lawsuit asserts that it was the dealerships’ “pattern and pratice” to try to enhance their sales and commissions this way, and that these acts were encouraged by the owners and managers of the dealerships.

The complaint states that eight individuals have been charged with criminal charges based on the alleged conduct, including conspiracy, bank fraud, wire fraud, and identity theft.

The class action lawsuit named Tony Serra, president of Serra Nissan, Abdul Mughal, the general sales manager, and Dwight Perry, a salesman, as additional defendants.

Plaintiff Ruth Bettis states that she purchased a 2011 Nissan Maxima from Serra Nissan on Aug, 2, 2013.

Bettis says she put $8,500 down on the $18,000 vehicle, and thought that she received a loan for the rest.

However, Bettis asserts that there must have been two sets of paperwork, because the Serra dealership submitted a loan for a brand new 2013 Nissan Maxima with only $1,500 as a down payment.

Bettis claims that the first time she saw the paperwork for that fraudulent loan was when she was contacted by a debt collector in 2015.

The Serra auto dealer fraudulent loan class action alleges that it was part of the common practice of the defendants to withhold the loan paperwork from customers, so they would not see the incorrect information on the loans.

The salespeople would artificially inflate the amount of the loan with unwanted add-on items to increase their commissions, according to the complaint.

More importantly, they would change consumers’ information to make sure the loans were approved by the banks. The class action argues that by falsifying loan documents, the Serra auto dealerships “threaten not only consumer safety but also the nation’s financial system.”

The lawsuit requests that the court certify two Classes.

The first is “[a]ll individuals in the United States who received an automobile loan processed by Serra Nissan that arose out of the fraudulent scheme to increase sales between 2013 and the present.”

And the second proposed Class is “[a]ll individuals whose credit has been adversely impacted as a result of the fraudulent scheme in violation of consumer protection laws between 2013 and the present.”

The class action seeks compensatory damages for lost money and emotional distress, three times the amount of those damages under Alabama and federal consumer protection law, as well as punitive damages.

Bettis is represented by Jason L. Yearout of Yearout & Traylor, PC.

The Serra Nissan Auto Dealer Fraudulent Loan Class Action Lawsuit is Ruth D. Bettis v. Serra Nissan / Oldsmobile Inc., et al., Case No. 2:16-cv-01260, in the U.S. District Court for the Northern District of Alabama, Southern Division.