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GM Expands Ignition Switch Recall

GM Press Release

02/25/2014

DETROIT – General Motors is expanding the recall of certain 2003-2007 model year vehicles to correct a condition with the ignition switch that may allow the key to unintentionally move or switch to the “accessory” or “off” position, turning off the engine and most of the electrical components on the vehicle.

In addition to 2005-2007 Chevrolet Cobalts and Pontiac G5 and Pontiac Pursuit sold in Canada only, GM is separately recalling 2003-2007 Saturn Ions, 2006-2007 Chevrolet HHRs, and 2006-2007 Pontiac Solstice and 2007 Saturn Sky models. The affected U.S. vehicle population, including those vehicles recalled Feb. 13, totals 1,367,146.

This expanded vehicle population raises the number of reported incidents involving frontal crashes, in which the recall condition may have caused or contributed to the non-deployment of the frontal airbags, to 31 involving 13 front-seat fatalities.

As part of the recall, GM is taking steps to address customer concerns and working with its suppliers to increase parts production and accelerate availability.

GM will notify all affected customers that in addition to recalling their vehicles and performing repairs at no charge to them, GM and its dealers will work with customers on an individual, case-by-case basis to minimize inconvenience associated with the recall.

“Ensuring our customers’ safety is our first order of business,” said GM North America President Alan Batey. “We are deeply sorry and we are working to address this issue as quickly as we can.”

Going beyond required written notification, GM, through its customer care centers and social media teams, is using customer records and communications channels to notify affected customers of the recall and additional actions the company is willing to take to relieve their concerns and minimize inconvenience.

GM is recalling these vehicles because the ignition switch torque performance may not meet GM specifications. If the torque performance is not to specification, and the key ring is carrying added weight or the vehicle goes off road or experiences some other jarring event, the ignition switch may inadvertently be moved out of the “run” position.

The timing of the key movement out of the “run” position, relative to the activation of the sensing algorithm of the crash event, may result in the airbags not deploying, increasing the potential for occupant injury in certain kinds of crashes.

Dealers will replace the ignition switch to prevent the unintentional or inadvertent key movement. Until this correction is performed, customers should use only the ignition key with nothing else on the key ring. As always, customers should drive responsibly and use their safety belts.

On Monday, the company submitted to the National Highway Traffic Safety Administration a detailed chronology associated with its initial recall of the ignition switch torque performance condition in Chevrolet Cobalts and Pontiac G5s and Pursuits. The chronology outlines events that happened during the time that elapsed between receiving the first field reports and issuing a recall.

“The chronology shows that the process employed to examine this phenomenon was not as robust as it should have been,” said Batey. “Today’s GM is committed to doing business differently and better. We will take an unflinching look at what happened and apply lessons learned here to improve going forward.”


GM Ignition Switch Recall

NHTSA Report

02/25/2014

GM announced on February 10, 2014, that they are recalling certain model year 2005-2007 Chevrolet Cobalt, and 2007 Pontiac G5 vehicles. Two weeks later, GM increased the recall to include an additional 748,024 model year 2006-2007 Chevrolet HHR and Pontiac Solstice vehicles and 2003-2007 Saturn Ion vehicles and 2007 Saturn Sky vehicles. In these models, the weight on the key ring and/or road conditions or some other jarring event may cause the ignition switch to move out of the run position, turning off the engine.

If the key is not in the run position, the air bags may not deploy if the vehicle is involved in a crash, increasing the risk of injury.

Owners may contact Chevrolet at 1-800-222-1020, Pontiac at 1-800-762-2737 or Saturn at 1-800-553-6000. GM’s number for the initial recall is 13454 and 14063 for the expansion. Note: Until the recall repairs have been performed, it is very important that customers remove all items from their key rings, leaving only the vehicle key. The key fob (if applicable), should also be removed from the key ring.

All vehicles associated with this recall:

Initial Recall (GM Number 13454)

Units Affected: 619,122


Expanded Recall (GM Number 14063)

Units Affected: 748,024



Justice Department Alleges “Buy Here, Pay Here” Dealerships Engaged in Illegal Lending Discrimination

DOJ Press Release 14-035

01/13/2014

Joint complaint with State of North Carolina alleges dealerships in Charlotte, NC, targeted African-American customers for unfair and predatory credit practices that violated Federal and State law.

The U.S. Department of Justice, the U.S. Attorney’s Office for the Western District of North Carolina and the North Carolina Department of Justice filed a lawsuit today alleging that defendants Auto Fare Inc., Southeastern Auto Corp. and Zuhdi A. Saadeh – the owners and operators of two “buy here, pay here” used-car dealerships in Charlotte, N.C. – violated the federal Equal Credit Opportunity Act by intentionally targeting African-American customers for the extension and servicing of installment sale contracts on unfair and predatory terms. The State of North Carolina also alleges that the defendants’ actions violated the state’s Unfair and Deceptive Trade Practices Act.

The complaint, which was filed January 13, 2014, in the U.S. District court for the Western District of North Carolina, alleges that the defendants engaged in a pattern or practice of “reverse redlining” by targeting African-American customers for installment sale contracts with inflated sales prices, down payments, and interest rates without meaningfully assessing the customers’ credit. The complaint states that Saadeh, who operates Auto Fare and United Car Sales, has used racial slurs to refer to African-Americans and made statements expressing his views that African-American customers have fewer credit options, making them more likely to accept the predatory terms of the contracts offered by the defendants.

The defendants’ practices resulted in rates of default and repossession that are higher than other subprime used-car dealers. The complaint also alleges that the defendants failed to provide customers with a reasonable notice of repossession, repossessed vehicles of customers who were not in default on their contracts, failed to give customers refunds they were due, improperly seized customers’ personal property in repossessed vehicles and used global positioning system devices to locate and repossess vehicles without informing customers that the dealership had installed these devices.

The U.S. Department of Justice, the U.S. Attorney’s Office for the Western District of North Carolina and the North Carolina Department of Justice investigated and filed the lawsuit jointly.

“Intentionally targeting African-Americans for contracts with predatory terms because of their race violates fair lending law,” said Acting Assistant Attorney General Jocelyn Samuels for the civil Rights Division. “By filing this lawsuit, the Justice Department is acting to ensure that subprime dealers in the auto industry provide credit in accordance with the law. The Justice Department will continue to ensure that people have equal access to credit, regardless of race.”

“The terms of a person’s loan should not be determined by their race,” said U.S. Attorney Anne M. Tompkins for the Western District of North Carolina. “Predatory lending and illegal discrimination will simply not be tolerated.”

“Charging people inflated prices based on their race isn’t the way to do business in our state,” said North Carolina Attorney General Roy Cooper. “These allegations show outrageous behavior that should be stopped.”

The Civil Rights Division and other agencies involved in this matter are part of the Financial Fraud Enforcement Task Force, established by President Obama to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov.

African-American customers who entered into instalment sale contracts for the purchase of automobiles at Auto Fare or United Car Sales since 2006, former employees of the dealerships and any other individuals with information relevant to this lawsuit are encouraged to contact the U.S. Department of Justice at 1-800-896-7743, mailbox 92, or at AutoFareLawsuit@usdog.gov.

A copy of the complaint, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department website at www.justice.gov/fairhousing. Fighting illegal lending discrimination is a top priority of the Justice Department. More information about the civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt.


Examples of Dealer Activities Considered by the Dept. of Justice to be

Discriminatory, Unfair, and Deceptive

Compiled By ADR Staff

01/13/2014

A joint complaint by the US Department of Justice and the State of North Carolina alleges BHPH dealerships in Charlotte, NC, targeted African-American customers for unfair and predatory credit practices that violated Federal and NC State law. The following allegations in the complaint specify types of activities deemed to be in violation of the Equal Credit Opportunity Act (ECOA) and/or Unfair and Deceptive Acts or Practices (UDAP) statutes.

Discriminatory and/or Unfair and Deceptive Acts or Practices:

Case Examples:

The complaint included the following case examples of Defendants’ actions giving rise to the allegations of discrimination and unfair and deceptive acts or practices.

Case 1, illustrating Defendants’ specific intention to sell credit contracts to African American customers using inflated pricing conditions:

Case 2, illustrating the Defendants’ practice of repossessing vehicles when the owner was not in default:






 

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