Yo-Yo Sale, Spot Delivery Fraud and Conditional Delivery Scams

Auto Contract Fraud

Yo-Yo Sales, Spot Delivery Fraud and Conditional Delivery Scams are one of the most widespread abuses in the automotive industry. This sophisticated form of fraud applies to both leased and purchased vehicles that are being sold as either new or used and is very difficult for most consumers to recognize that they are being defrauded. Yo-Yo Sales, Spot Delivery Fraud and Conditional Delivery Scams always require the buyer signing a second loan or lease agreement.

The scam frequently begins with a “Spot Delivery” or a “Conditional Delivery” which happens when a buyer takes a delivery of a vehicle from a dealership before the final finance arrangements have been made. A Spot Delivery most often happens when a vehicle is purchased or leased on a Saturday or Sunday, late in the evening or during a holiday when most lenders are closed.

The “Yo-Yo” Sale happens when the buyer gets a call from the dealership claiming that the financing for the vehicle has fallen through and that the lender requires a change to the purchase agreement such as a co-signor, a larger down payment, a higher interest rate, a change in the length of the loan, the removal of a vehicle “trade-in” or a larger monthly payment.

Yo-Yo fraud usually begins with the salesperson calling the buyer and telling them something along the line that they need to come into the dealership to see the finance manager and discuss something about their paperwork. Often vague and ambiguous, the purpose behind the call is to get the buyer to come back into the dealership. The dealership usually waits a few days to a few weeks to make sure that the buyer has grown attached to the vehicle. Their hope is that the buyer has already shown the vehicle to their friends and family, bought insurance for the vehicle and would be embarrassed or unwilling to have to return the vehicle to the dealership.

When the buyer returns to the dealer, the salesman or finance manager will attempt to improve the dealership’s profit under the guise that the bank or a lender is requiring the structure of the original contract to change. If the buyer agrees to sign the new contract, quite often the dealer will break the law by having the buyer sign a new contract that is backdated. When a vehicle was traded in against the original deal, the dealer may claim that the vehicle was sold, leaving the buyer no alternative but to sign the new contract or be stranded without a vehicle. The Yo-Yo scam is a high pressure tactic that gives the fraudulent dealership a very one-sided opportunity to renegotiate deal for higher profit. Some buyers who have refused to sign a new contract have been threatened with having the vehicle repossessed, reported stolen, their credit ruined or even with being arrested.

One way of finding out if a dealer is trying to fool you into a Yo-Yo Sale is to ask them to put into writing why you failed to qualify for financing under the original contract. If they refuse to put it in writing, then you know something is wrong. Either the dealership has been caught lying to you, or they are trying to keep you from finding out that the original contract is no longer valid.

If a dealership has asked you to sign a second agreement and you have refused, it is very important that you immediately take a few easy steps to protect yourself and your rights.

  1. Remove all of your personal belongings from the vehicle in the event that the dealership decides to repossess it.
  2. Remove all purchase or lease documentation from the vehicle as well as the vehicle’s books. Make a photocopy of the registration sticker and place all documents in a folder or envelope for safe keeping. Remember, every piece of paperwork is important!
  3. Document each and every excuse the dealer makes as to why you need to sign a second contract.
    • Ask the dealer :
      • "Why do I have to bring the vehicle back?”
      • "What went wrong with the first contract?”
      • "Why isn’t this my vehicle any longer?”
      • “Who is responsible for this?”
      • “What happens if I do not bring the vehicle back?”
  4. Call an attorney immediately to discuss you rights and legal options.

If you suspect that you may be the victim of a Spot Delivery or Conditional Delivery that resulted in a Yo-Yo Scam, or if a dealer in California has informed you that you need to either sign a new contract or return your vehicle, then give us a call at 213-612-7701 or fill out our FREE Vehicle Evaluation Form and one of our CA Dealer Fraud Attorneys will review your case to discuss what legal options are available to you.

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Lemon Law Auto Fraud serves the following California counties: Inyo, Imperial, Kern, Los Angeles, Mono, Orange, Riverside, San Bernardino, San Diego, San Luis Obispo, Santa Barbara, Tulare, and Ventura.

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Disclaimer: The following Lemon Law and Auto Fraud information has been compiled from various public sources. It is presented online for informational use only, and without warranty as to its accuracy, timeliness, or completeness. This site does not replace any official versions of the information presented, nor does use of this information constitute an attorney-client relationship. It is always recommended that you do not make any decisions about any legal matter without first consulting an attorney to ensure that all of your rights are protected, as well as to find out if your vehicle meets the established Lemon Law or Auto Fraud Criteria for your state.