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Fraudulent? Or Just ‘Sleazy?’

(This article was originally appeared in the

Many prospective clients call my office claiming they have been defrauded and want to explore their legal remedies. This seems to be exceptionally common in a sales context (specifically car sales) though not always.

A typical consultation goes like this:

Client: I was defrauded.

Me: Ok, tell me what happened?

Client: This salesguy sold me a car. He was really pushy and told me he was selling me an amazing car and that he got me a great deal. But after talking to my friends, they are telling me that I did not get a great deal and one of my friends even told me that he also bought a car from the same salesguy and the salesguy also told him he was giving him an “amazing car.”

Me: Ok, so, did the salesman lie to you?

Client: Yes, he did! He said he would get me an amazing deal and that I was going to get a great car! I got neither, just a regular car and a “regular” deal. I really regret buying this car! I want to sue to get my money back!

This article will explore what actually constitutes legal fraud and what you can do to protect yourself from non-fraudulent but “sleazy” sales tactics. What people often perceive as fraud is nothing but typical – and legal – sales tactics. In order for a plaintiff (the person suing) to succeed on a claim for fraud, the plaintiff must prove the following elements: 1) a false representation of fact, 2) knowledge of the falsity by party making false representation, 3) intent to deceive the party by making false representation, 4) reasonable reliance by the innocent party, and 5) actual loss suffered by the innocent party. Where the above hypothetical client’s claim would fail are on two grounds 1) that the representation was false (ie, that “amazing car” and “great deal”) are not false statements of fact. Also, the plaintiff would probably also fail on his reliance being “reasonable.” Further, it is not a false statement because, again, a “great deal” is a vague and subjective term.

In the context of sales specifically, it is actually legal for salespeople to exaggerate and engage in hyperbole. This is known as “puffery.” The law and courts recognize that sales tactics include subjective claims about products and expect that buyers are aware of this. In other words, it is not fraud for a sales pitch to include claims such as “the best burger in the world!” or “the finest craftmanship out there.” These are subjective claims and cannot be proven or disproven. As in the example above, “great deal” and “amazing car” are subjective and simply cannot be measured.

So what does constitute a false claim of fact? False claims are more along the lines of tampered speedometers and misrepresentation in the number of miles a car has, a car’s wreck history, or the interest rate and fees on a loan. In other words, hard details and numbers. Lastly, although not necessarily related to fraud, be aware that car dealers specifically are required to disclose certain information when selling a car, which you can read about here.
But back to fraud—so what can you do to protect yourself from legal sales tactics, regardless if it’s fraud or not? Here are some tips:

  1. Ask for specific data to back up claims. If a salesperson says that his product is “very good” or “the best” ask for actual data. His claims will start to be for what they are and if he lies about the facts, then you can allege fraud and seek a remedy accordingly.
  2. Research beforehand. The most effective method of asking appropriate and targeted questions is to research the item you are seeking to buy. If for, for example, the item is typically financed (such as a car), research the metrics for what a reasonable or exceptionally good deals and what deals are common.
  3. Don’t hesitate to say you want to think about it. A common sales tactic is to creating a sense of urgency for the buyer. In addition to the puffery tactics used above, the sales person will tell a potential buyer that a certain deal has a time limit on it and that the buyer must act now or lose the deal. Know that there will always be a good deal out there and that competitors will be happy to take your money if you don’t give it to the sales person in front of you (ie, offer a better deal). Any time you have an offer that looks like it has a lot of bells and whistles, simply say you want to think about it, shop around, or ask friends who have more knowledge about the product.
  4. Ask for all promises in writing. This is straight forward. If the sales person makes an offer or discount, ask that it be put in writing and signed by the manager.
  5. Read the contract carefully and look out for hidden fees. Do not feel rushed to sign off on paperwork or assume that all the numbers are disclosed orally.
  6. Look over the contract and make sure you understand every fee that you are being charged. Legally speaking, if you sign the contract and had an opportunity to review, you have no claim for fraud. Unfortunately, people feel often defrauded when they realize they are in fact simply blindsided by fees they did not fully realize at the time of signing a purchase contract.

It’s no fun feeling like you have been “taken for a ride” (pun intended). However, just because you feel that way does not mean you have a legal claim for fraud. With that said, there are still many ways to protect yourself and ensuring that you feel comfortable going forward to with a purchase. It’s as simple as doing your research beforehand and being aware of common (and legal) sales tactics.

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