Bill granting full refund for defective cars awaits PNoy's signature – Philippine Star

MANILA, Philippines — A proposed law that protects buyers from defective motor vehicles has been approved by Congress, Senator Bam Aquino said on Friday.

Aquino said the Senate has ratified the bicameral conference committee report on the Philippine Lemon Law of 2014 before the body’s sine die adjournment on Wednesday.

The Senate bill will be transmitted to Malacañang for the approval of President Benigno Aquino III.

“The passage of the Lemon Law is crucial since owning a vehicle is crucial in today’s fast-paced life, especially for businessmen and entrepreneurs,” said Aquino, sponsor of the consolidated bill filed by Senators Cynthia Villar and JV Ejercito.

Earlier, the bicameral conference committee adopted the House version of the Lemon Law, authored by Las Piñas Rep. Mark Villar.

Under the measure, consumers will get a full refund if the brand new motor vehicle that was bought would not be of standard and quality, 12 months or 20,000 kilometers from date of original delivery.

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If the consumer remains unsatisfied with the efforts to the repair of the vehicle up to four times, the Department of Trade and Industry will exercise exclusive and original jurisdiction over disputes.

“Aside from consumer protection, the Lemon Law will provide consistent standards of quality and performance in the auto industry,” Aquino said. -Louis Bacani

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Senate adopts 'Lemon Law' vs defective cars – InterAksyon


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MANILA – A law aimed at protecting buyers from defective motor vehicles has finally been passed, which gives consumers the right to claim full amount paid if not satisfied with the car, Senator Bam Aquino announced on Friday.

Senator Aquino said the Senate ratified the bicameral conference committee report on the Philippine Lemon Law of 2014 before the body’s sine die adjournment on Wednesday.

After that, it is to be transmitted to Malacanang for President Aquino’s approval.

Earlier, the bicameral conference committee adopted the House version of the Lemon Law, authored by Las Pinas Rep. Mark Villar.

“The passage of the Lemon Law is crucial since owning a vehicle is essential in today’s fast-paced life, especially for businessmen and entrepreneurs,” said Aquino, sponsor of the consolidated bill filed by Senators Cynthia Villar and JV Ejercito.

“Aside from consumer protection, the Lemon Law will provide consistent standards of quality and performance in the auto industry,” he added.

The law calls for the return to the consumer of the full value of money if the motor vehicle that was bought does not turn out to be up to standard and expected quality, 12 months or 20,000 kilometers from date of original delivery.

If the consumer remains unsatisfied with the efforts to repair the vehicle up to four times, the Department of Trade and Industry (DTI) will exercise exclusive and original jurisdiction over disputes.



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Lemon Law protecting motor vehicle buyers hurdles bicam – Sun.Star

SENATOR Paolo Benigno Bam Aquino IV on Friday said that after years of waiting, a law that protects buyers from defective motor vehicles has finally been passed.

The law calls for the return to the consumer the full value of money if the motor vehicle that was bought is not of standard and quality, 12 months or 20,000 kilometers from date of original delivery.

If the consumer remains unsatisfied with the efforts to the repair of the vehicle up to four times, the Department of Trade and Industry (DTI) will exercise exclusive and original jurisdiction over disputes.

“The passage of the Lemon Law is crucial since owning a vehicle is crucial in today’s fast-paced life, especially for businessmen and entrepreneurs,” said Aquino, sponsor of the consolidated bill filed by Senators Cynthia Villar and JV Ejercito.

“Aside from consumer protection, the Lemon Law will provide consistent standards of quality and performance in the auto industry,” he added.

The Senate ratified the bicameral conference committee report on the Philippine Lemon Law of 2014 before the body’s sine die adjournment Wednesday.

Earlier, the bicameral conference committee adopted the House version of the Lemon Law, authored by Las Pinas Representative Mark Villar.

The bill will be transmitted to Malacanang for signature of President Benigno Aquino III. (Camille P. Balagtas/Sunnex)

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Still hoping for a stronger lemon law – Philippine Star

It’s not certified as an urgent bill, so consumers will not be seeing any urgent action on the proposed lemon act that seeks to provide some measure of protection to individuals who have purchased brand new vehicles. But we can always hope it becomes a law within the decade.

In the Lower House version that had been passed on final reading last month, vehicles that are bought but found to be defective (thus, establishing them as lemons) may be replaced with a similar or comparable motor vehicle or refunded the purchase price plus collateral charges.

As most proposed laws in the country, this will go through the legislative cycle and calendar where the various versions in the Lower and Upper Houses will be approved by their respective constituents, and finally pass through more debates by a joint committee of both houses.

What the Lower House has approved, thus, may turn out to be a much-mangled version of what the law will eventually become. This will depend on a lot of things, including how strongly the parties involved (consumers and vehicle industry stakeholders) will react.

Definitely second hand purchases excluded

Nevertheless, there are some strong clues about the final version. The most glaring, based on the approved bill that passed on final reading by the Lower House, is the fact that there’s going to be a very strong chance that second hand vehicle purchases will be excluded from a future law.

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This perhaps explains why the bill has gone through some relatively painless discussions, or rather opposition, from the phalanx of vehicle manufacturers, distributors, authorized dealers and retailers. If the bill had attempted to include second-bought vehicles, this may still be in its infancy stages.

In the US, coverage and inclusion of second hand vehicles varies by state. But in Canada, the law includes new and used, owned and leased vehicles that are from the current model year and up to an additional four model years.

There is a strong basis for the inclusion of second-bought vehicles, and this is mainly because of the expressed manufacturers’ warranty that now normally is good for three years (although there are now five-year warranties that are being issued already).

Therefore, any mechanical defects within the maturity of warranty should technically be honored regardless of whether the current owner is the original or the second buyer. Or in this regard, even the third or fourth buyer.

There was an earlier bill filed in the Senate that included even second hand vehicles. But most probably, to speed up the process of “consumer protection,” this provision will be dropped in the final version. After all, the approved Lower House version explicitly confines its scope to “strengthening consumer protection in the purchase of brand new motor vehicles.”

Still partial to the selling party

Still, the proposed law is still more partial to the party that sold the car. First off, the scope of coverage could be as few as one percent of new cars sold a year. But I guess consumers should be thankful that our lawmakers are still doing something to protect buyers of brand new vehicles who have paid hard-earned cash for their dream ride.

After four tries, the irritated and exasperated owner of the defective vehicle may then file for proceedings that will either give him a replacement unit or his money. The latter recourse is highly unlikely since the proposed law leaves this decision to the motor vehicle distributor’s prerogative.

The proposed law also confines validity to the first 12 months from the date of delivery or up to 20,000 kilometers of mileage. But the tougher ruling is that the complaining party should have checked in the vehicle for succeeding repairs on the same complaint within 30 days from the release following the last repair attempt.

Therefore, if the same defect appears after one month from the last check in for servicing of the complaint, the first occurrence is technically no longer counted. This is tough, tough love for the poor consumer.

Clearly, the proposed law in its current version leaves much to be desired if we are serious about invoking consumer protection. The Philippines has a very robust second hand or used-car market, and this is where new laws are deemed crucial.

Tips when buying second hand vehicles

In the absence of any bill aimed at protecting those buying used cars, here are some tips that could come in handy. After all, without a law protecting those who have bought pre-owned lemons, the new owner can find himself stuck with a big headache, or even risk his own and his passengers’ safety.

Get the vehicle’s history. In the Philippines, this is a big challenge, and here is an area that should be covered by consumer protection laws. Usually, getting to know the existing owner is a good way. Ask for records of repairs and maintenance; if there’s none, there could be something being hidden from your view. So beware.

The maintenance record is a good indication of how the current owner has been maintaining his car. It’s likely to tell you if you have to change the oil and oil filter, the brake pedals, tires, and other parts that are normally due for changing depending on how old the vehicle is. Factor these in on the negotiating price.

Bring a good mechanic. A mechanic that you can trust will be able to tell you the state of brakes, tires, radiator, or exhaust of the vehicle you’re buying. Insist on getting the vehicle lifted for a more thorough inspection. Be on the lookout for underbody damages.

A good mechanic will be able to spot recent paint jobs that try to hide newly-repaired dents. Or damage to engine parts if the vehicle has been submerged in flood waters.

Bring the mechanic along for a test drive. Test the vehicle on up and down inclines, in varying speeds, rounding curves, on braking and acceleration.

Lastly, size up the current owner (if you’re not buying from used-car dealers). A racing enthusiast may have driven the car for sale through some endurance tests, and this is a factor for additional discounts. A car owned by an old lady may not have been ideally “stretched,” and would have its peculiar set of problems.

Remember money isn’t the only consideration when buying a new or second-hand vehicle; safety comes first.

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We are actively using two social networking websites to reach out more often and even interact with and engage our readers, friends and colleagues in the various areas of interest that I tackle in my column. Please like us at www.facebook.com and follow us at www.twitter.com/ReyGamboa.

Should you wish to share any insights, write me at Link Edge, 25th Floor, 139 Corporate Center, Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at reydgamboa@yahoo.com. For a compilation of previous articles, visit www.BizlinksPhilippines.net.

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Still hoping for a stronger lemon law – Philippine Star

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Hyundai Owner Says Co. Shouldn't Escape Lemon Law Suit – Law360 (subscription)



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By Juan Carlos Rodriguez

Law360, New York (June 02, 2014, 4:05 PM ET) —
The lead plaintiff in a class action accusing Hyundai Motor America of illegally buying back or replacing defective vehicles without refunding consumers for certain costs on Friday urged a California federal judge to reject the company’s bid to dodge the suit, saying its arguments don’t pass muster.

The lawsuit says Hyundai has avoided paying consumers for costs associated with buybacks or replacements including service contracts, insurance and registration fees. It also says the company improperly mandates certain deductions from the vehicles’ repurchase prices, such as for “any condition beyond normal wear and tear.”

But in an April motion to dismiss, the company argued it already fulfills its legal obligations under California’s lemon law.

Hyundai said it offered the required reimbursements to plaintiff Lori Robbins, and that Robbins had no right to claim reimbursement for other costs under California or federal law.

Hyundai said the California Song-Beverly Consumer Warranty Act, which Robbins claims the car company violated, doesn’t require coverage of the insurance or service contracts as those are optional third-party services. It also said the act only requires reimbursement for initial registration fees, not for the fees every year the vehicle was registered.

In a brief in opposition to Hyundai’s motion, Robbins said the act clearly says a manufacturer must reimburse a buyer for the “actual price paid or payable.”

“At the time of purchase, plaintiff paid $2,490 for a third-party extended service contract and $750 for GAP insurance,” the brief said. “Though conceding this, HMA nevertheless assumes, without explanation or support, that these amounts ‘are not part of the actual price.’”

This contradicts controlling authority, Robbins said, which, under a California appeals court’s decision in Mitchell v. Blue Bird Body Co., holds that “actual price paid or payable” includes all amounts plaintiffs became legally obligated to pay when they agreed to buy the vehicle, including finance charges.

Hyundai has also argued that Robbins had no standing to protest Hyundai’s repurchase condition that she be responsible for any damages beyond normal wear and tear because no such damages were assessed against her vehicle.

Robbins responded that under the Song-Beverly act, manufacturers are not entitled to any reductions such as “wear and tear,” and that predelivery mileage offset is the sole permissible deduction.

“Ignoring the legislative history, case law, and the statutory mandate, HMA asserts that conditioning repurchase or replacement offers for wear-and-tear items is proper because the California Code of Regulations allows an arbitrator to offset any amount ‘for which the customer is justly responsible,’” Robbins said.

She also attacked the company’s argument that she had no right to bring claims under the Magnuson-Moss Warranty Act because she failed to first contest the reimbursement through Hyundai’s informal dispute procedure.

“Plaintiff need not do so … because HMA’s informal dispute procedure — the BBB Autoline — is not an informal dispute settlement procedure for the purposes of the MMWA,” the brief said.

The plaintiff is represented by Steve Borislav Mikhov and Mark D. O’Connor of O’Connor & Mikhov LLP and Karen E. Nakon and Payam Shahian of Strategic Legal Practices APC.

Hyundai is represented by Michael L. Mallow and Darlene M. Cho of Loeb & Loeb LLP.

The case is Lori Robbins v. Hyundai Motor America et al., case number 8:14-cv-00005 in the U.S. District Court for the Central District of California.

–Additional reporting by Kaitlyn Kiernan. Editing by Emily Kokoll.

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Hyundai Owner Says Co. Shouldn't Escape Lemon Law Suit – Law360 (subscription)

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More lemon law claims? More new car owners come forward after they spot rust … – WPTV

WEST PALM BEACH, Fla. – Have you ever looked under your car or truck?

New car owners are shocked at what they’re finding.

A Consumer Watchdog investigation in February revealed new vehicles that look like they’re used.

It’s prompted others to take action.

Retired and ready to enjoy life, Cathy Stepaniak bought a 2014 Toyota Tacoma to cover all the roads she’ll travel.

“I worked 25 years to save up for this truck,” explained Stepaniak.

She’s already traveling a road she never expected.

“I’m very upset I cried all the way to the dealership,” explained Stepaniak.

Stepaniak took her car to the dealer after watching our Consumer Watchdog investigation into rusty new trucks.

“We were glued to it,” explained Stepaniak.

When Stepaniak went outside to look at her own truck she found rust.

“This is holding the exhaust system toward the back,” explained Stepaniak.

John Higgins also saw our Consumer Watchdog investigation.

“I thought I was the same guy on TV with the exact same problem,” explained Higgins.

His Ford truck is nearly new.

“I see a lot of rust on the axle and drive shaft,” explained Higgins.

Both customers were told the rust was normal, and their manufacturer didn’t do anything to help them.

They’ve only been to the dealer once. After three trips, they can make a lemon law claim.

That’s what Michael Gallagher did who we featured in our first story.

After calls by his lawyer and the Consumer Watchdog, Toyota took care of the issue.

“I couldn’t thank Jenn enough,” explained Gallagher. “Toyota changed their mind and they ultimately settled the case with my lawyer and myself and ended up getting a check.”

Gallagher bought a new truck, and this time around he checked it out.

“First thing I did was look under the vehicle and it looks great,” explained Gallagher.

Something every driver should do even if you’re buying new. You never know what happened to that truck between the factory and your driveway.

A car expert believes these trucks are exposed to something along the road to Florida.  Whether it’s salt, salt water, or a chemical.

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More lemon law claims? More new car owners come forward after they spot rust … – WPTV

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Ford Says Lemon Law Class Action Violates Speech Laws – Law360 (subscription)



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By Beth Winegarner
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Law360, San Francisco (May 21, 2014, 6:24 PM ET) — Ford Motor Co. urged a California federal judge on Wednesday to strike a proposed class action claiming the carmaker illegally forced customers to fix defective warrantied vehicles before returning them, arguing the lawsuit violates state free-speech laws because it’s founded on agreements between Ford and the plaintiffs to buy back their defective trucks.

An attorney for Ford told U.S. District Court Judge Phyllis J. Hamilton that named plaintiffs Michael Sansoe and Eric Frazer’s lawsuit seeks to bar Ford from reaching settlements with other customers who threaten…

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Ford Says Lemon Law Class Action Violates Speech Laws – Law360 (subscription)

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'Lemon Law King' sues DOT over forms – Green Bay Press Gazette

MADISON — An attorney contacted by the state Department of Transportation to help draft forms in the wake of changes to Wisconsin’s lemon law filed a lawsuit on Thursday to stop its enforcement until allegedly incorrect documents posted online are fixed.

Vince Megna, the self-proclaimed “Lemon Law King,” filed the lawsuit in Dane County Circuit Court. Megna wants the court to order the department to take down a form he alleges is not in compliance with the law and replace it with the correct one.

Megna is also asking that a document that applies to cases brought under the old law be reposted. Until all of that is done, Megna wants Wisconsin to not enforce the new lemon law, which took effect in March.

A spokeswoman for the state Department of Justice, Dana Brueck, declined to comment on the lawsuit.

Wisconsin’s lemon law applies to new vehicles on which the manufacturer fails to repair a warranty-covered defect after four tries in one year or fails to provide a timely refund or replacement.

Before the Legislature passed the changes over Megna’s objections in December, car owners had six years to sue the carmaker, with mandatory double damages. Now, they have three years and can only get actual damages, or half as much as before.

The law change also required DOT to update and make new forms available that consumers must submit in order to bring a lemon law claim.

Megna was approached by a DOT attorney in April to help interpret the law and draft the forms. But Megna declined, saying it would be a conflict given that he expected to bring cases against car manufacturers and dealers.

One form posted on the DOT website is “replete with errors” and a second required form has yet to be posted, making it impossible for a consumer to bring a valid lawsuit, Megna claims in his filling.

Megna included copies of the emails he exchanged with the DOT attorney to help bolster his argument that the department was having difficulty understanding its duties under the law.

“In my personal opinion, this provision may virtually gut the law,” DOT attorney John Sobotik wrote to Megna on April 25 about a form created by the department. “What consumer is going to know he/she has to provide a silly WisDOT form to a manufacturer in order for the Lemon Law to apply to repairs they have done?”

The lemon law changes had broad bipartisan support in the Legislature and the backing of car dealers and manufacturers, including General Motors, trial attorneys and the state chamber of commerce.

Megna has filed more than 3,000 lemon law cases over the past 25 years and won a $618,000 judgment in a 2012 lemon law case against Mercedes-Benz USA LLC.

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'Lemon Law King' sues DOT over forms – Green Bay Press Gazette

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Lemon law attorney Vince Megna sues state, says no consumer can make a … – Madison.com

Lemon law lawyer Vince Megna Thursday sued the state claiming that the Wisconsin Department of Transportation’s website is so misleading and riddled with errors that it’s impossible for consumers to file a lawsuit under the state’s new lemon law.

Last year, the Republican-controlled state Legislature approved changes to the lemon law that, among other provisions, cut the time for suing a carmaker from six to three years after purchase and eliminated mandatory double damages for failure to make timely refunds or replacement of a damaged vehicle. It also requires consumers to submit DOT forms in order to force carmakers to make good on their warranties.

The law took effect on March 1.

Megna’s lawsuit, filed in Dane County Circuit Court, lists the Department of Transportation, DOT Secretary Mark Gottlieb and Attorney General J.B. Van Hollen as defendants. A DOT spokeswoman said the department had no comment on the lawsuit.

The new lemon law, inspired by a $618,000 judgment Megna won in 2012 against Mercedes-Benz USA, was backed by Wisconsin Manufacturers and Commerce, the Alliance of Automobile Manufacturers, the Recreational Vehicle Industry Association, the Truck and Engine Manufacturers Association and the Wisconsin Automobile and Truck Dealers Association.

Under the law, specified forms are supposed to be available for consumers seeking repair of damages, a refund or a replacement vehicle. But Megna claims none of the forms have been drafted in a manner that complies with the law.

He claims that the only form that resides on the website — one  for consumers electing a refund or a replacement vehicle — is so “replete with errors” that it doesn’t comply with the law.

“Any consumer using this form in making a Wisconsin lemon law claim would suffer irreparable injury with no adequate remedy at law, because the claim would be defective and the manufacturer would have no obligation to provide any lemon law relief,” the lawsuit contends. “Further, the consumer is prohibited by the lemon law statute of using any claim notice other than the claim form prescribed by the DOT, resulting in the consumer’s total inability to receive lemon law relief under any circumstances.”

A form required for a consumer to report defects does not exist on the website.

“As a result, no Wisconsin consumer can make any lemon law claim” under the new law, the lawsuit claims.

Consumers who purchased vehicles before March 1 still can make claims under the old lemon law, but those consumers “would likely be confused and mislead” by the website and send out the claims under the new law, resulting in inferior remedies, Megna claims.

Megna is demanding:

• An order that the DOT refrain from posting mandatory forms until they can be drafted in a way that complies with the new law and removal of the forms that don’t comply with the law.

• That the DOT post a notice to consumers who purchased vehicles before March 1 that their claims fall under the old lemon law.

• That the DOT fix legal and informational errors on the website.

• An order preventing the attorney general from enforcing the lemon law until valid forms are posted.

• Reinstatement of the old lemon law until the state can post forms that comply with the law.

As evidence that the DOT is having problems interpreting the law, Megna includes an email string between himself and DOT Assistant General Counsel John Sobotik, who on April 25 wrote Megna seeking his advice before posting the required forms.

In the email, Sobotik, referring to a requirement that a consumer provide a form for any warranty repair, wrote: “In my personal opinion, this provision may virtually gut the law. What consumer is going to know he/she has to provide a silly WisDOT form to a manufacturer in order for the lemon law to apply to repairs they have done?”

Megna, citing a high probability that he would be involved in litigation over the law, declined to offer his advice.

Responding back to Megna’s email, Sobotik offered criticism of the Legislative Reference Bureau, the Legislature’s bill-drafting service.

“I was out Friday night with other state lawyers who told me that the LRB  these days is not drafting legislation with legislators, but instead are asked simply to transcribe the junk interest group drafts that are handed to them for verbatim transcription,” he wrote on May 5. “There is little care, apparently, about whether the statutes will make sense or mesh.”

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Author: STEVEN ELBOW | The Capital Times | selbow@madison.com

Lemon law attorney Vince Megna sues state, says no consumer can make a … – Madison.com

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