Car dealer forced me to sign an illegal FTC privacy notice

April 8, 2009 9:40 PM

Car dealer forced me to sign an illegal FTC privacy notice - offering no opt out. Help me change his business method so he doesn't do this to others.

I bought a new car last week, and the biz rep had me sign a number of documents, including an FTC privacy notice informing me that the dealership reserves right to share my private information with marketers, financial institutions, and "non-affiliated third parties" ....i.e.anyone in the entire world. Here's the document.

The salesman kept up a constant patter as he briskly pointed me to the signature line on this document. He said it was to ensure my privacy and refered only to internal communications between the dealership and Mazda. That was, obviously, completely false, and when I pointed out the discrepancy he acknowledged that his description was deceptive, and "apologized"...but continued to insist that I sign it. I asked whether my refusal to sign the document would cancel the deal on the car. He replied that it would.

Finding myself 75 miles from home and without means of getting home without my new car (yup, a mistake), I signed. I gave the dealership the right to give anyone any information I'd given them, and any information he'd gotten from my credit report, at his sole discretion.

FTC regulations seem to require that the consumer must be offered an opt-out, and there's no opt out language at all (quite the contrary, re: the way this document was forced on me). This seems to be a blatant violation of the FTC regulation referenced in the document.

I'm guessing there's nothing I can do to patch my compromised privacy (except maybe give the dealer an "updated" address/phone for me). But I'd like to nail this dealer....at least get him to change his business method re: privacy.

Any suggestions as to how to proceed? I can complain to FTC, but they don't "resolve" complaints, they just add them to databases in order to spot larger non-compliance trends. I can complain to CT motor vehicles, but they wouldn't likely know/care about FTC regulations. I could sue, but I'm not sure what remedy I'd be seeking. They've broken the law. There's got to be some way I can bring them into compliance...? Who does the enforcement?

posted by jimmyjimjim to Law & Government (28 answers total)

Response by poster: Also, I should note that CT Consumer Protection refers all complaints about auto dealerships to CT DMV. And, per above, I really doubt CT DMV knows/cares about FTC regulations.
posted by jimmyjimjim at 9:46 PM on April 8, 2009

I'd recommend writing an e-mail to Consumerist.com.
posted by gryftir at 9:47 PM on April 8, 2009 [2 favorites]

Contact the Better Business Bureau and your state attorney general's consumer protection office. But, that aside, you should have called the dealer's bluff. No way would they have given up on a car sale, especially in this economy, just because you refused to sign a privacy policy.
posted by amyms at 10:00 PM on April 8, 2009 [5 favorites]

Yeah, definitely call the BBB. I don't know if you have grounds to sue; it would be difficult proving damages, since the American legal system doesn't value privacy very highly.

But it's not like any of that information was really private in the first place. C.f. Steve Rambam's Privacy is Dead; Get Over It talk (named after that quote by Scott McNeely)
posted by qxntpqbbbqxl at 10:25 PM on April 8, 2009

Response by poster: ------
"No way would they have given up on a car sale, especially in this economy, just because you refused to sign a privacy policy"
------

Yes, of course. In the clarity of hindsight, that's clear. But there's a certain inertia when signing piles of papers... even when doing so cautiously. Plus there's a pervasive aversion to work against when you're spending lots of money, and the energy applied to overriding that apprehension can easily overshoot all sorts of corollary unpleasantness.

The dealer said no one had ever objected before, and I actually believe him. Surely most signed because he was baldly, aggressively lying to them as they attempted to skim the language, and they went with his momentum rather than with what their eyes told them. But some likely saw through it, as I did, yet found themselves signing the damned thing anyway.

I should have thrown the pen on the desk and fumed "deal's off". But even being a sort of stand-up (read "conflictive") kind of guy, that sort of move doesn't happen easily in such heightened, fraught circumstances.
posted by jimmyjimjim at 10:33 PM on April 8, 2009

Response by poster: qxntpqbbbqxl - [if computers didn't have cut and paste, nobody'd ever say your name],

My issue isn't the privacy per se so much as the deception and law-skirting.
posted by jimmyjimjim at 10:35 PM on April 8, 2009

1st Send a letter, certified mail, immediately revoking your consent on the form. 2d Notify your attorney general's office. Good luck, hate this BS (sigh)!
posted by inkyr2 at 10:49 PM on April 8, 2009

If you're certain you're correct about the illegality of the form (IANYL), put a big sign on your car that says "This dealership made me sign an illegal form!", park it in front of the dealership until they decide to give you back the form.
posted by HuronBob at 3:18 AM on April 9, 2009

I don't see how they forced you to do anything at all. Here it is in your own words:

Finding myself 75 miles from home and without means of getting home without my new car (yup, a mistake), I signed.

He didn't put a gun to your head. He didn't ask for others to hold you while he controlled your hand to force you to sign. He didn't forge your signature.

You voluntary, of your own free will, signed the form because of the inconvenience of finding a way home without your new car.

If the form itself is illegal then a lawyer can help you. If not, why would anyone invalidate the form just because you changed your mind after the fact? I don't see what ground you have to stand on. You knew exactly what the form was for, and you went ahead and signed it. That's all there is to it, but of course contracts are the domain of lawyers, so do consult one.
posted by splice at 3:40 AM on April 9, 2009

This is the type of thing that class action lawyers thrive on. Very little to no damage accruing to an individual, but a regular pattern of illegal activity.
posted by yclipse at 4:04 AM on April 9, 2009

IANYL.

This is part of why we have lawsuits - to change the behaviour of those acting illegally. Dig around more in the FTC's site and find out if there is a "right of private action." Or if there are statutory damages available. Etc., etc. You should probably hire a lawyer, but this is also the kind of thing that you can do yourself (probably small claims would be best if you are doing it yourself - check your state's rules and limitations for small claims), but you can also hire a lawyer.

Also, consider publicizing this illegal activity locally, but be careful about defamation, etc.
posted by iknowizbirfmark at 5:51 AM on April 9, 2009

Splice, it sounds as if you have never bought a car before. Salesmen have training in high-pressure tactics and it can intimidate the hell out of the most stalwart among us. The OP is wanting to know how he can make it behoove the dealership to stop outright lying to others who wouldn't even notice the fact that they are signing a piece of paper that says the opposite of what the salesman is saying that it says. Yes, you are responsible for whatever you choose to sign, but I would assume that it is against the law for the dealership to misrepresent what that paper actually says.

I like most of the ideas above, but for the public shame factor, the Consumerist is the way to go. Plus you would perhaps be helping to educate others about deceptive tactics in this, as well as many other, dealerships.
posted by thebrokedown at 5:55 AM on April 9, 2009

You voluntary, of your own free will, signed the form because of the inconvenience of finding a way home without your new car.

It actually sounds like some duress and attempted fraud. Just because you signed it, doesn't mean it's bound in steel and unbreakable. If it matters that much to you, in addition to notifying the Attorney General's office in your state, go find yourself a lawyer and ask about taking them to court and see about having that contract thrown out with perhaps some punitive damages to boot.
posted by Atreides at 6:10 AM on April 9, 2009

Call up a lawyer who's a member of the National Association of Consumer Advocates in your state.
posted by footnote at 6:24 AM on April 9, 2009 [1 favorite]

The regulation you linked to is limited to financial institutions. See Section A. If you read the document carefully, you'll see that the privacy opt-out provisions in that regulation deal with joint account holders for customers of financial products. Your dealer is not engaging in banking-related activities and is thus not subject to the requirements of that regulation, and even if it were, this isn't a situation where there are joint account holders, so no opt out would be required anyways. The regulation you cite is completely irrelevant to your situation. As such, I highly doubt this is illegal. Unsavory, yes. Illegal, no.

You didn't technically need to sign. It would have been a pain in the ass to get a cab or call a friend, but you could have done so. You could even have offered to pay more for the car to avoid signing the document. But the terms of the deal were fully disclosed, and you chose to sign the document anyways.

If you don't want the dealer to do this in the future, you can call the BBB and Consumerist, but your best bet would have been refusing to sign in the first place. Voting with your feet doesn't work as well after the fact, you know?
posted by valkyryn at 6:30 AM on April 9, 2009

Response by poster: Slice, say the document read "I hereby certify that I, the vehicle's purchaser, will burglarize one neighborhood home per night and bring the booty to the office of this business manager", and the dealer, as he rushed me through paperwork, told me "this one's just to confirm your identity so you can get the license plates", and insisted that I needed to sign it to get the car. Am I "stuck"? Do I take responsibility for the contract I've signed?

The document is just as illegal. It was forced upon me in a coercive manner (there is coercion that's short of threatening to break one's kneecaps) and I was deliberately deceived and misdirected in the process of signing it. Even if the paper was legal (which it isn't), that makes the agreement questionable at best (if I can prove the deception...which I actually could by sending in a stooge customer to act as witness).

If you thought my goal here was to somehow "unsign" the piece of paper, then you didn't read my OP. My goal is to get the dealer to add an explicit opt-out section to the document, in accordance with FTC law and to stop lying about it to customers. If I can also patch this privacy chasm for myself, so much the better. I guess my best shot at that is to call the dealer with a phony change of address/phone, but maybe someone will have another suggestion
posted by jimmyjimjim at 6:49 AM on April 9, 2009

Response by poster: Sorry, here's a version with live links (as an old school BBS veteran, I keep forgetting we can do that now!)

valkyryn, thanks for reading the page more precisely than I did. But you're using questionable logic here:

"The regulation you cite is completely irrelevant to your situation. As such, I highly doubt this is illegal"

Just because there IS a requirement that financial institutions offer an opt out doesn't mean there's NOT one for other institutions. And, indeed, that's the case. Here's the correct document from FTC


The opt-out exemptions noted on that page clearly don't apply to the sort of broad third party disclosures referred to in the document I signed.
posted by jimmyjimjim at 7:04 AM on April 9, 2009

OP, your analogy is completely off-point. No one is asking you do to anything illegal. Your objection is not to the content of the document--it requires neither you nor the dealer to do anything illegal--but to the manner in which you were induced to sign. If you think what happened here was "coercive," your definition of "coercion" won't hold up in any court of which I'm aware. Just because you don't like something doesn't make it illegal. The level of protection for non-health-related information is actually pretty low. I'm not aware fo any state or federal statute or regulation which outlaws what happened here.

The dealer is correct in his assessment that the release you signed is necessary. They're going to need to give information about you to numerous interested parties, and unless you sign that form, they can't do this. You are correct in your sense that the release actually permits them to do quite a bit more than that, but dealerships interact with literally hundreds of insurers and financial institutions every year, so building an exhaustive list and limiting their release to that list is impossible. We're talking insurance companies, several state governmental agencies, lenders, credit reporting agencies, etc., all of whom you want the dealer to talk to, as them doing so is critical to your continued, undisturbed use and ownership of your vehicle. This is a pretty standard way of going about things.

You weren't deceived either. Not materially, anyways. The fact that the person selling you the car doesn't really understand the documents he's having you sign isn't going to win you any points in court. There is no FTC provision which prohibits what happened here.

Get over it. Your information isn't really that private, and whining about it is a waste of time.
posted by valkyryn at 7:16 AM on April 9, 2009

jimmyjimhim, let's look at the actual law on point, shall we? Note that three code sections are listed at the top of your release.

The first section is 16 C.F.R. § 313.13. That provision permits your dealer to disclose non-public personal information to non-affiliated third parties with whom they have a marketing contract. Subsection (a) reads as follows:

The opt out requirements in §§313.7 and 313.10 do not apply when you provide nonpublic personal information to a nonaffiliated third party to perform services for you or functions on your behalf, if you:

(i) Provide the initial notice in accordance with §313.4; and

(ii) Enter into a contractual agreement with the third party that prohibits the third party from disclosing or using the information other than to carry out the purposes for which you disclosed the information, including use under an exception in §313.14 or 313.15 in the ordinary course of business to carry out those purposes.

they've provided you notice, but are specifically excluded from the opt-out requirements for sharing your information with third parties with whom they have marketing contracts.

Section 314.14 is pretty intuitive, so I won't quote it. It basically permits your dealer to share your information, with notifying you of having done so and without giving you the opportunity to opt out, in order to complete a transaction that you asked them to make. You want them to do this, so I'll leave that be.

The last relevant provision is 16 C.F.R. § 313.15.

Section 313.15(a) begins, in part:

The requirements for initial notice in §313.4(a)(2) [and] for the opt out in §§313.7 and 313.10. . . do not apply when you disclose nonpublic personal information:

Section (a) then lists several situations which don't pertain here, but sub-section 7 includes:

(i) To comply with Federal, State, or local laws, rules and other applicable legal requirements;

In your situation, reporting personal information about you to various state and local governments, in addition to various financial institutions is required by law.

Your release is limited to situations covered by §§ 313.13, 313.14, and 313.15. It's right there are the top of the page. Ergo, having notified you as required by § 313.13 (but not by §§ 313.14 or 313.15) they don't have to give you an opportunity to opt out.

Let it go.
posted by valkyryn at 8:09 AM on April 9, 2009

Response by poster: "OP, your analogy is completely off-point. No one is asking you do to anything illegal"

The point's not the legality of what I'm doing, it's the legality of what they're doing. My signing a document (even forget the fraudulent and coercive way it was put to me) doesn't bind me regardless of the legality of that document. An illegal contract is illegal regardless of agreement. If that illegal contract is signed under fraudulent and coercive conditions, still more possibilities open up. This thread was intended to explore those possibilities. Thanks to all with suggestions.

I don't think a persuasive case could be made that the biz rep failed to understand the paper. If this does go to court, I will have at least one witness who's gone through the process who will testify to the nature of his patter, which was unquestionably deceptive rather than naive. He even shielded most of the document with his hand while he steadily pointed to the sig line. I had to ask him to move his hand.

As to there being no FTC provision, please read the link in my previous entry, which clearly states that the dealer must offer an opt out...except for some very specific cases, which are far narrower than the sweeping language of this document. If you think I've misread that document, great, let me know. Otherwise, I'll just deem this the inevitable "I question the very basis of your query!" AskMeFi response amid all the (equally inevitable) helpful ones.
posted by jimmyjimjim at 8:11 AM on April 9, 2009

Response by poster: Just saw your second posting.

First, we're both talking about a FAQ about a law, not the law itself. Obviously, the actual law needs to be consulted (and will be!).

Second, before starting this thread, I googled and found myriad of these documents on the web, many of them for auto dealerships. I checked many of them (though not all), and all contained opt-out offers. If opt-out is not required of them, those other dealers are sure being extraordinarily respectful of privacy, above and beyond the requirement of the law.....
posted by jimmyjimjim at 8:15 AM on April 9, 2009

Response by poster: ....and also I disagree with your reading of the FAQ. It stipulates specific exemptions (all of them reasonable IMO) from the need to offer opt-out. But the incredibly broad disclosure stipulated in this dealer's document (it doesn't get much broader than "unaffiliated third parties") spreads way beyond the scope of those narrow and specific exemptions.

Even so, what matters is the law, not a FAQ. And the real world biz practices of other dealers sure indicates to me that opt-out is de rigueur.
posted by jimmyjimjim at 8:21 AM on April 9, 2009

So you're gonna start receiving more junk mail. Just get a larger recycling bin. NBD, really.
posted by torquemaniac at 8:28 AM on April 9, 2009

Signing an agreement does not, by itself, necessarily mean that the agreement is valid or would be upheld by a court. See a lawyer. Seriously.
posted by Ashley801 at 9:00 AM on April 9, 2009

I'm not talking about an FAQ anymore. I'm talking about the law, i.e. the FTC regulations which govern the transaction in question.

I have consulted the law. The law says you're wrong.

Read the opt-out documents you find from other dealers carefully, including and especially the fine print. I think you'll find that they exclude the ability to opt out for situations covered by §§ 313.13, 313.14, and 313.15. If they let you opt out of other things, that's nice of them, but they really don't have to let you opt out of those categories, and they really shouldn't either.

Which is exactly my point: the document you signed is binding on you because it was legal. The disclosure permitted by the document you signed is not incredibly broad; it is limited to precisely those situations covered by §§ 313.13, 313.14, and 313.15, because it says so right there at the top of the page. They can release your information only to entities with whom they have an existing marketing contract, entities with whom it is necessary disclosure your information in order to complete the transaction you initiated, or entities to whom they are required by law to disclose your information. That's it. The law permits them to do this, and the law doesn't require them to let you opt-out.

I've point out specific provisions in both the document you signed, the relevant FTC regulations, and shown how they relate to each other. Ask any lawyer you can find and they'll tell you exactly what I've told you here. If you don't understand this at this point, that's your problem.

I'm done.
posted by valkyryn at 9:07 AM on April 9, 2009 [1 favorite]

Response by poster: "I've point out specific provisions in both the document you signed, the relevant FTC regulations, and shown how they relate to each other. Ask any lawyer you can find and they'll tell you exactly what I've told you here. If you don't understand this at this point, that's your problem."

-----------
Let me rewrite that for you:

"I've pointed out specific provisions in both the document you signed, the relevant FTC regulations, and shown how I believe they relate to each other, though I'm not a lawyer. Ask any lawyer you can find and I'm guessing they'll tell you exactly what I've told you here. Of course, even lawyers can disagree, and neither of us is a lawyer!"

You might, of course, add back in some peevish condescension, if you'd like, but that's really the bones of it.

But, hey, you're done!
posted by jimmyjimjim at 9:48 AM on April 9, 2009

"I've pointed out specific provisions in both the document you signed, the relevant FTC regulations, and shown how I believe they relate to each other, though I'm not a lawyer. Ask any lawyer you can find and I'm guessing they'll tell you exactly what I've told you here. Of course, even lawyers can disagree, and neither of us is a lawyer!"

It's probably best that you take this to a lawyer, then.
posted by speedo at 9:51 AM on April 9, 2009

Response by poster: To precisely ascertain the law, yeah, sure, of course. But the evidence of (apparently) all other dealers offering opt-out plus my reading of the FTC FAQ gives me what I consider a reasonable assumption that the dealer's in the wrong. So I was seeking advice re: going forward based on that assumption...and I intended to clarify the assumption as I proceeded.

Thanks for the advice above, everyone. I like the Consumerist idea, also the BBB. And the attorney general's office is likely a good first stop, as they might offer clarity on the law (saving me from paying a lawyer right away)...though, hmm, perhaps not, since they're state and FTC regulations are federal. But it's worth a try.
posted by jimmyjimjim at 10:26 AM on April 9, 2009