Pub. 16 2017-2018 Issue 4

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S I S S U E N O . 1 , 2 0 1 8 6 new jersey auto retailer I know there are two schools of thought when it comes to brokering. Some dealers rely upon the business brought in by brokers as a critical component of their bottom line. Other dealers believe that brokers, particularly the less reputable individuals, are harming the reputation of franchised dealers because consumers often confuse the fly-by-night broker with the legitimate dealership at which they take delivery. Regardless of which view you have of brokering, we can all agree that regulators MUST enforce existing laws, and they are not doing so now. We can disagree on whether the existing law is right for New Jersey or not, but for as long as there are rules and regulations on the books, they must be enforced. Brokering is not, specifically, prohibited by New Jersey law, but state motor ve- hicle regulations clearly state “no person shall engage in the business of buying, selling or dealing in motor vehicles” unless they are licensed. Brokers blatantly promote their ability to arrange a new car sale or lease. Some go so far as to hold themselves out as a “dealer” who can arrange the sale or lease of virtually ANY new vehicle from ANY manufacturer. They are clearly “dealing in motor vehicles,” which is a violation of the motor vehicle law, and misrepresenting that they are a franchised dealer is a viola- tion of the Consumer Fraud Act. So why aren’t regulators doing anything to hold these unlicensed businesses accountable? New Jersey’s licensed new car and truck retailers are required to meet strict finan- cial, facility and customer satisfaction standards to qualify as an authorized sales and service franchise for their man- ufacturer(s). In order to stay in business, franchised dealers must follow the rules, yet unlicensed brokers meet none of these standards and are allowed to continue mis- representing themselves to an unsuspecting public, to the detriment of the licensed deal- ers who dot every “I” and cross every “T.” NJ CAR works hard to educate dealers about consumer advertising rules and to promote fair play in the marketplace. Un- scrupulous advertising practices and bla- tant marketplace misrepresentations, like those used by many unlicensed brokers, make it difficult for legitimate dealers to compete for consumers when the rules are so grossly tilted in another entity’s favor. EVERYONE should be required to play by the same rules. One potential reason for regulator IN- ACTION may be actions taken by some franchised dealers themselves. Regardless of the parties involved (consumer, broker and dealer), the final transaction MUST be completed on a licensed dealer’s pa- perwork. The New Jersey Motor Vehicle Commission (NJMVC) seems satisfied that if a licensed dealer is involved in the transaction, they can ignore the fact that an unlicensed broker is really the consumer’s point of contact. This is a problem because, even though brokering is not banned by State law, it is included in the definition of what it means to buy, sell or deal in motor vehicles in the State’s motor vehicle law (N.J.S.A. 39:10-19 et seq). When a dea ler repor t s a broker to NJ CAR that they feel has crossed the line, the Coalition contacts both the Attorney General and the New Jersey Motor Vehicle Commission to make them aware of the unlicensed brokering operation, calling particular attention to any obvious adver- tising and disclosure violations that anyone engaged in the buying or selling of motor vehicles is subject to. NJ CAR will con- tinue shining a light on blatant violations of existing law when it is brought to the Coalition’s attention. Not only do regulators need to be more aggressive with their enforcement, manu- facturers also must take steps to protect the unauthorized use of their franchise trade- marks, which hurt both the manufacturer AND their dealership franchisees. I’ll say it again- regulators MUST crack down on those entities that are flagrantly ignoring existing law. Unlicensed brokers prey upon vulnerable consumers with a variety of bait and switch scams and misleading representations about the non-existent relationships they have with manufacturers and the services they are ill-equipped to provide. I want to invite dealers to engage with NJ CAR (and each other), regardless of your position on brokering. Please reach out to me directly and share your views on brokering. The Coalition needs to hear all points of view in order to develop a com- prehensive plan to address any activity that violates existing laws or regulations. Chairman’s MESSAGE | BY ROBERT J. LARSON Regulators Need To Enforce Existing Laws Regarding Brokering