FTC Roundtable Spurs Debate on Lack of Borrower Education
SAN ANTONIO, Texas ― Lenders and dealers faced off against military leaders and consumer advocates at a symposium on vehicle finance, as Federal Trade Commission officials and other regulators set out to define a path for the newly minted Consumer Financial Protection Bureau.
Tension brewed in the early sessions, as anecdotes of deceptive and illegal practices ― particularly aimed at servicemembers ― seemed to be construed as the norm. Military lending was a large focus of the event, which took place at St. Mary’s University School of Law, not far from installations like the Lackland and Randolph Air Force Bases and the Fort Sam Houston army base.
“I’m a car dealer, not a crook and a criminal,” said Greg Zak, president of used-car dealership Horizon Automotive Ltd.
Another dealer, Marc Cross, admitted that “in every industry, you’re going to find some bad apples.” But the co-owner and general manager of Jordan Ford in San Antonio countered with: “I don’t have time to sell the car twice,” he said, which might happen if financing isn’t finalized before the buyer leaves the dealership with the car. “Plus, it’s not even the right way to do things,” he added. “It’s not smart and not efficient, and doesn’t promote long-term customers.”
By the afternoon, some of the hostility had subsided, and panelists from all corners of the industry brainstormed ways to improve the financing process. One of the main thrusts of the seminar’s discussion was the issue of financial education. Consumers, both military and civilian, often lack a basic understanding of the car-buying process. As such, they open themselves up to potential aggressive sales or financing tactics.
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