Page 2 The Skanner March 22, 2017
Challenging People to Shape
a Better Future Now
Bernie Foster
Founder/Publisher
Bobbie Dore Foster
Executive Editor
Jerry Foster
Advertising Manager
Christen McCurdy
News Editor
Patricia Irvin
Graphic Designer
Melanie Sevcenko
Reporter
Monica J. Foster
Seattle Office Coordinator
Susan Fried
Photographer
2016
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Opinion
FTC Takes Action Against ‘Yo-Yo Scams’ in the Auto Industry
W
hen it comes to pur-
chasing and financ-
ing a vehicle, Black
and Latino consum-
ers — more often than other
racial or ethnic groups — are
frequently targets of decep-
tive advertising and abusive
financing practices.
In recent days, two law
enforcement agencies have
acted to curb yo-yo scams
and other abusive and decep-
tive practices of auto dealer
groups. The separate actions
link a shared consumer abuse
that occurs from Los Angeles
to New York.
A settlement announced in
mid-March between the Fed-
eral Trade Commission (FTC)
and Sage Automotive, which
has dealers throughout the
Los Angeles area, requires
Sage to stop yo-yo scams and
deceptive financing and ad-
vertising practices. Sage will
also pay more than $3.6 mil-
lion to be returned to con-
sumers who were harmed by
these illegal actions. This en-
forcement action is the first-
time that the FTC has taken
action on yo-yo scams.
Yo-yo scam occurs when a
car dealer sends a consumer
home thinking that the financ-
ing is final, but then later tells
the consumer that he or she
has to agree to a new financ-
ing contract or return the car.
Often, dealers tell the con-
sumer that the down payment
is non-refundable, the car
traded-in has been sold, and/
Charlene
Crowell
NNPA
Columnist
or threatens to have the con-
sumer prosecuted for theft, if
the car is not returned.
According to FTC’s com-
plaint, Sage frequently en-
gaged in yo-yo scams, falsely
told consumers that their
money or trade-ins would not
be returned, and threatened
consumers with criminal
“
The FTC stated, in filing the
complaint, “The car-buying
process is a two-way street.
The FTC expects dealers to
honor their contractual obli-
gations, and will pursue those
who use yo-yo financing tac-
tics and pack unwanted costly
add-ons onto consumers’ con-
tracts.”
“These practices are not
new, but the increased regu-
latory attention is new and is
very welcome,” noted Chris
Kukla, an EVP with the Cen-
ter for Responsible Lending.
“We urge the FTC to continue
to use their authority to cre-
ate a level playing field in the
auto sales
and lend-
ing mar-
ket. This
will
en-
sure that
legitimate
dealers can fairly compete for
business and  that  consumers
will be treated fairly and hon-
estly.”
On March 16, the New York
City Department of Consum-
er Affairs (DCA) announced
charges against Queens-
based Major World. Major
World’s dealerships and its
principals are charged with
using deceptive and ille-
gal practices to profit from
low-income and non-English
speaking consumers. These
actions violate the city’s own
Consumer Protection Law.
“Our city’s working fami-
lies, so many of whom are im-
A car dealer...tells the con-
sumer that he or she has to
agree to a new financing
contract or return the car
prosecution or repossession
if they did not sign new, more
expensive finance contracts
than they were initially prom-
ised.
By targeting financially
challenged consumers and
consumers with limited En-
glish language skills with
false promises of low prices,
low down payments and low
monthly payments, Sage also
packed unauthorized add-on
products into contracts.  The
end result for many custom-
ers was that they drove off
with a more costly financing
contract than originally un-
derstood.
migrants and often struggle
to make ends meet, rely on
their cars to go to work and
school,” said DCA Commis-
sioner Lorelei Salas. “Buying
that car is usually one of the
largest purchases a family
makes and it sickens me that
Major World, who claims to
treat its customers like fami-
ly, so deceptively traps hard-
working New Yorkers into
auto loans they can’t afford.
Here in New York City, we
are leveraging all the tools we
have to curb this burgeoning
national crisis.” 
Major World’s deception
includes:
• Advertising Deceptively to
Lure Vulnerable Consum-
ers
• Inflating the Price with
Non-Existent Accessories
• Falsifying the Consumer
Credit Applications and
• Failing to:
• Disclose and even conceal
financing terms;
• Provide contracts in Span-
ish after negotiating in
Spanish; and
• Sell roadworthy vehicles
DCA is seeking revocation
of Major World’s licenses to
operate second-hand automo-
bile dealerships in New York
City and nearly $2 million
in restitution and fines from
Major World on behalf of 25
known consumers who were
harmed by its deceptive and
unlawful practices.
America’s Middle Neighborhoods: Neighbors on the Edge
E
ver heard the term “mid-
dle neighborhoods”? If
you haven’t, you have
likely visited, lived in or
driven through one more re-
cently than you think.
Middle neighborhoods are
communities on the edge of
growth and decline. When
we discuss middle neigh-
borhoods we are describing
neighborhoods that have four
main characteristics: neigh-
borhoods where homeowners
can purchase real estate for
an affordable rate, neighbor-
hoods where crime rates are
low, neighborhoods where
school performance is suf-
ficient, and neighborhoods
where employment rates are
adequate. Essentially, home-
buyers in middle neighbor-
hoods are willing to test the
odds with the hopes that their
neighborhood will improve
rather than decline.
Middle neighborhoods are
areas that are doing just well
enough. We are not focusing
as much resources or atten-
tion on these neighborhoods
because we have yet to see an
increased need to invest in
these areas. However, if we
aren’t careful these neighbor-
hoods will teeter towards de-
cline overnight.
In Philadelphia, over 40 per-
Dwight
Evans
State Rep.
(PA-02)
cent of the population lives in
middle neighborhoods.
I know firsthand what is at
stake for America’s middle
“
Pennsylvania House Appro-
priations Committee, I fought
hard to expand access to
healthy, fresh foods for every-
one in our city and across our
state; and supported efforts
to provide adequate funding
for our public schools.
The first bill I introduced in
the 115th Congress, the Reha-
bilitation of Historic Schools
Act of 2017, H.R. 922, would
amend the Internal Revenue
Our middle neighborhoods need a
clear lane in both our public policy
and investment conversations
neighborhoods. I grew up in
North Philly and today I live
in West Oak Lane just blocks
away from Germantown High
School, my alma mater.
Two main trends are con-
tributing to decline in our
middle neighborhoods. One,
housing trends show that jobs
are moving away from middle
neighborhoods and second,
many suburbs compete with
new homebuyers for resi-
dents.
This brings us to the ques-
tion: what are some ways we
can counter these trends to
help America’s middle neigh-
borhoods?
As a former Chairman of the
Code of 1986 to allow public
school buildings to qualify
for the rehabilitation cred-
it which in turn would give
our public schools the neces-
sary resources and funds to
make improvements to school
buildings across the country.
How can we expect our stu-
dents to better themselves
when their classrooms are
falling apart around them?
We need a public school sys-
tem that supports the needs
of our students, teachers and
parents. Our students already
have a lot on their plates, and
shouldn’t have to worry about
going to school on an empty
stomach.
Thus, when we think about
the issue of food insecurity
in our middle neighborhoods
we need to look for ways to
broaden access to fresh, qual-
ity, affordable foods for peo-
ple in our most underserved
areas.
During my time in the Penn-
sylvania State Legislature, I
championed Pennsylvania’s
Fresh Food Financing Ini-
tiative which links public
and private funds to expand
and build grocery stores in
food deserts across our state.
Through the initiative we
brought nearly 100 grocery
stores to areas in Philadelphia
and underserved areas across
the commonwealth that previ-
ously had very limited access
to fresh fruits and vegetables.
Our middle neighborhoods
need a clear lane in both our
public policy and investment
conversations. We need to be
cognizant and incredibly vig-
ilant as this relates to housing
trends that are impacting our
city.
Middle neighborhoods are
home to real people like you
and I. Now is the time to refo-
cus, redistribute and reinvest
our attention on building a
policy agenda that puts Amer-
ica’s middle neighborhoods
back on top.