Today's Trends in Credit Regulation

The Garbage Factory
By Thomas B. Hudson

A reputation is a valuable thing to lose. The Boston-based National Consumer Law Center has for years enjoyed a reputation among compliance lawyers as a producer of really first-rate legal publications on compliance topics such as automobile fraud, the cost of credit, credit discrimination and the like. The publications have a pro-consumer flavor, and I warn our young lawyers to beware the occasional editorial slant, but the books are so good that I know few industry compliance lawyers who don’t have all of the NCLC volumes in their libraries.

Then came the 2010 “Repo Madness” report. That piece of claptrap disguised as research made the case in loud press releases that self-help repo of vehicles by creditors was more dangerous than defusing improvised roadside bombs. The uncritical press echoed NCLC’s claims, as did many who didn’t bother to, you know, actually READ the so-called “report.” Those who did recognized it for what it was – typical anecdotal stuff posing as research that resulted in shrill headline claims that bore no relation to the content of the report.

Well, NCLC has done it again.

This time the headline screamed “New National Law Center Survey Finds Consumer Abuses in Auto Sales and Financing Are Common Throughout the United States.” Timed for release just as the Federal Trade Commission held its first auto sales and lease “Roundtable”, its prominent bullet points claimed:

  • 87% of attorneys said they receive between 21 and 200 or more requests from consumers each year from consumers experiencing problems buying and/or financing a vehicle.
  • 91% of attorneys turn people away who said they suffered abuses in auto dealer sales/finance transactions due to too many requests for help.
  • 83% of attorneys said that the consumers they interviewed “always” or “often” received a product (car or financing) from an auto dealer that was different from what was described to them during the car purchasing transaction.
  • 96% of attorneys said that the abuses their clients suffered were part of a general industry practice.

Do these bullet points support the screaming headline? You be the judge.

When you actually READ the survey, a few things jump out at you.

First, who were these lawyers who were surveyed? NCLC says that they were “participating legal aid and private attorneys working on consumer auto issues.

Oh. Lawyers who hold themselves out as consumer lawyers get a lot of consumer complaints. Wait a minute while I stop the presses.

OK, next question. How broad was this survey? In a paragraph buried on the last page of the survey results, we learn that NCLC sent a questionnaire to 400 lawyers who identified themselves as working on auto issues as part of their practices. A less-than-overwhelming 48 lawyers responded.

So 352 of the 400 lawyers declined to respond to the NCLC’s questionnaire. Although NCLC crowed that “The results [of the survey] represent the experiences of practicing attorneys in all regions of the United States”, those who bothered to dig deeper than the headlines and the bullet points learned that exactly three lawyers from the Southwest bothered to respond, while the response from other regions was sparse – seven from the Northeast, eight from the West, 10 each from the Mid-Atlantic and the Midwest, and 12 from the South.

And oh yeah – well over half (32 of the 48) of the lawyers indicated that they handled 100 or fewer requests for assistance from consumers each year. That is, at the very most, 3,200 requests. And NCLC’s completely unsupported assumption is that all those complaints are valid.

I sometimes wonder whether NCLC has any appreciation of the size of the new and used car marketplace in the United States. With 13 million new cars and maybe twice that many used cars (I’m guessing) sold each year, any unbiased reader of the survey would say, “OK, there are some crooked dealers in the U.S., and these responding lawyers are trying hard to clean them up.”

What an unbiased reader certainly would not say is “New National Law Center Survey Finds Consumer Abuses in Auto Sales and Financing Are Common Throughout the United States.”

I have a loud and clear message to NCLC. A survey of 48 lawyers whose practices involve consumer auto claims and asking if they see abuses is like a survey of the choir to see if they believe in God. You can pretty well predict the answers before you ask the questions. If you value your reputation for excellence, stop producing garbage.

I don’t often say so in public, but I have a Masters Degree in Social Science Research, and actually know how to do research on issues like this. Think I ought to apply for a job at NCLC?

Naaaah. They evidently have no need for someone who knows how to do this stuff. Besides, who wants to work for a garbage factory?

Thomas B. Hudson is a partner in the Maryland office of Hudson Cook, LLP. Tom can be reached at (410) 865-5411 or by email at

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