Car-Buyer Emptor

Auto trade-in gone sour throws wrench into motorist's bank account

Gladys Nuvangyaoma didn't plan to buy a car when she and her son dropped by Joe Florek Volkswagen Audi in Flagstaff last September.

But Nuvangyaoma, who lives nearly two hours from Flagstaff on the Hopi Reservation, instantly fell in love with a 1998 red Ford pickup she saw on the lot, and enthusiastically decided to take the plunge. The next day, she drove back to Flagstaff and traded in her '89 Bronco; the new truck was financed through Bank One.

Within weeks, however, Nuvangyaoma found herself in the middle of a financial mess that she'd played no part in creating. Florek's dealership -- which was supposed to pay off Nuvangyaoma's trade-in vehicle -- was raided by the FBI and shut down after complaints that the dealership was exaggerating the amenities on luxury vehicles.

Wells Fargo, the creditor for the '89 Bronco, soon began pressuring Nuvangyaoma to make payments on the car -- payments that the dealership never made. Despite her efforts to explain the unusual situation to bank representatives, the problem only escalated. It was compounded by the fact that Nuvangyaoma also had a bank account at Wells Fargo, which is the only nearby banking option for residents of the reservation.

"Wells Fargo's collection department started calling me, saying that I had the obligation, that I had to pay for it," she says. "Then I started noticing that my checks had bounced, and I got letters letting me know that they had taken money out of my account. When I explained my situation to them, they seemed to understand, but they still kept taking money out of my account. They're still calling me about it."

As recently as April 2, Nuvangyaoma received a letter from Wells Fargo's collections department, saying, "We hereby demand strict compliance with the terms of the contract you previously signed." The letter went on to warn that the bank would exercise "all rights and remedies" available to it, including "repossessing any property securing the contract."

Wells Fargo and Bank One representatives did not respond to New Times' requests for an interview. The FBI also declined to talk about the Florek case.

Saddled with two car payments at the same time, and seeing her credit report being damaged in the process, a desperate Nuvangyaoma sought help from Tempe attorney Mike Shaw. Shaw contends it was irresponsible of Wells Fargo to pressure Nuvangyaoma, rather than approaching Bank One directly. He says that many other car buyers could unwittingly be put in the same position, particularly since another Florek-owned dealership, Greymountain Auto Connection, outside the Navajo Reservation, was also recently shut down by federal agents.

"Nobody wrote letters to people like Gladys, saying, 'The people who bought your new contract, they're going to be liable to pay us, so make arrangements,'" Shaw says. "No, they went into her checking account one day and they took money out of there and applied it to her payments to them.

"Her credit report was excellent until Wells Fargo started reporting her as slow to pay. And I'll bet you if she went to buy a car from another dealer, they'd probably bump the interest rate up 2 or 3 percent as a result."

Because Joe Florek's dealership closed down shortly after the transaction, Nuvangyaoma also has yet to receive her title for the Ford pickup she purchased last September.

Shaw says he is planning legal action against Bank One, which is refusing to pick up payments for Nuvangyaoma's trade-in.

Shaw has had better luck with City Financial, which financed a new vehicle purchased at Greymountain Auto Connection by a Kayenta resident named Shirleen Bowsley. Last August, Bowsley traded in a 1997 Extended Cab Ford Ranger for a 2000 Dodge Stratus at Greymountain. Bowsley says that after two months of struggling, in vain, to get Greymountain to make its payments on her trade-in vehicle, the dealership was raided, and she was soon confronted with an anxious, unsympathetic Wells Fargo loan department.

"City Financial have been great all along," Shaw says of Bowsley's case. "City Financial knew that they were on the hook if they couldn't get the dealership to pay it off, that they'd be liable for it, and they admitted that.

"But Wells Fargo didn't do anything to try to get paid by City Financial, or anything else. They were harassing my client. I don't know how she did it, but she scraped up enough money for a while to pay on both the old and new car. Finally, she couldn't make both of them, so she pays off the new one, and they tell her that she's in default for not paying them."

Shaw says City Financial representatives agreed to send Wells Fargo a letter, promising to make payments on the trade-in, and asking Wells Fargo to remove any derogatory information from Bowsley's credit account. But Shaw says Wells Fargo has insisted that it can't tamper with Bowsley's credit information, even if it means correcting a damaging error.

"It got me so pissed, I told their representative on the phone, 'You're a liar,'" Shaw says. "It's not that they can't do it, they choose not to do it."

Shaw describes it as sadly ironic that the FBI dealership raids, which were intended to combat unscrupulous business practices, have put car buyers of modest means in a tight squeeze.

"It's great that the FBI shut them down, because they deserved it," he says. "But there are a lot of people who are going to be caught in midstream."

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