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Special Lemon Law Report: How Government Fails Consumers Who Have Defective Vehicles (Part 6)

Posted on by Sergei Lemberg

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Connecticut, Massachusetts, and New York

Detailed information about state-operated lemon law arbitration proceedings is generally not publicly available. Upon inquiry, Connecticut, Massachusetts, and New York provided some information for lemon law arbitrations in 2014.

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In New York, only 70 percent of lemon law arbitration applications were accepted. In those cases where arbitration hearings were scheduled, arbitrators decided in favor or the consumer 49 percent of the time. While it is impossible to know what transpired in each of the actual arbitration hearings, it appears odd that consumers who cleared the hurdle of delivering an acceptable set of documents and who paid the required $250 fee were only successful 49 percent of the time. More striking is that New York has a population of 19.7 million people, yet its lemon law arbitration program was able to recover settlements, refunds, or replacement vehicles for only 65 people in 2014. Similarly, Connecticut, with a population of 3.6 million people, was able to recover settlements, refunds, or replacement vehicles for only 28 people in 2014.

The number of Massachusetts residents served by the Commonwealth’s lemon law arbitration program is unknown. Connecticut achieved results for 53 percent of applicants and New York achieved results for 22 percent of applicants, so it is reasonable to infer that Massachusetts, with a population of 6.7 million people, helped between 21 and 50 residents recover refunds or replacement vehicles during 2014.

Thus, it seems as though state-operated lemon law arbitration programs are not effective advocates for owners of defective vehicles.

Consumer Redress through BBB Auto Line

The Better Business Bureau offers a program, “BBB Auto Line,” which provides dispute resolution for consumers who have defective vehicles. BBB Auto Line is funded by automakers, and states that it operates independently of car manufacturers.

Consumers who participate in BBB Auto Line submit a claim, which is then forwarded to the manufacturer. BBB Auto Line facilitates settlement offers from manufacturers to consumers, and arranges for arbitration when a settlement is not reached or when the consumer requests arbitration.

The consumer’s responsibilities during the arbitration process are similar to those outlined above for Connecticut arbitration hearings. If a BBB Auto Line arbitrator decides in favor of the consumer, the consumer could be awarded a buyback, a replacement vehicle, or reimbursement for past repairs. The consumer can accept or reject the arbitrator’s decision.

In most states, BBB Auto Line is a voluntary, optional program. In California, a state of 38.8 million people, BBB Auto Line is the state-certified program for all but three automakers (Tesla, Toyota, and Porsche). In 2014, BBB Auto Line settled, mediated, or arbitrated 870 of 2,008 California cases submitted. Of the 870, only 271 received a buyback or replacement vehicle. Other claims were denied (233), reimbursed for repairs (83), given an extended service plan (10), or ordered to repair (247).

BBB Auto Line data and population per state is as follows:

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When compared to the number of state-run arbitrations reported by Connecticut and New York, it appears as though state arbitration programs deliver better outcomes to consumers than BBB Auto Line. Connecticut’s state-run arbitration program provided consumers with buybacks or replacement vehicles in 28% of cases, in contrast to BBB Auto Line’s 19%. In New York, the state-run arbitration program produced buybacks or replacement vehicles in 81% of cases, in contrast to BBB Auto Line’s 27%.

It is not unreasonable, then, to draw the conclusion that the BBB Auto Line program may be even less effective than state-run arbitration programs.

Continue to Findings, Page 4

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