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ATTORNEY GENERAL SUES MONTGOMERY COUNTY VEHICLE LEASE BROKER

    ATTORNEY GENERAL SUES MONTGOMERY COUNTY VEHICLE LEASE BROKER
    HARRISBURG, Pa., Nov. 1 /PRNewswire/ -- Consumers who use vehicle lease brokers to get out from under heavy car payments run great risks -- including having their car repossessed -- but a Philadelphia area broker fails to warn consumers of the dangers, Attorney General Ernie Preate Jr. charges in a suit filed today.
    The broker gets vehicles from consumers who can't afford the monthly payments and then finds individuals who -- after paying $5,000 or more to the broker -- take the vehicles and assume the payments, Preate said.
    "We allege, for example, that the defendants don't tell consumers that a sublease agreement may violate the original financing or lease agreement," Preate said.  "As a result, a vehicle may be repossessed by a creditor or lien holder even if the person who subleased the vehicle is making the payments."
    Named as defendants in the suit filed in Commonwealth Court by Preate's Bureau of Consumer Protection are Qinyan Leasing and Sales Inc., 11 Bala Ave., Bala Cynwyd, Montgomery County, Pa., and its president, Leonard Churn, of 6100 City Ave., Philadelphia.
    The suit alleges that the Qinyan advertises in the Philadelphia area to find consumers to take possession of others' vehicles and assume the monthly payments.
    Although the original owners or lessees pay no money to Qinyan, consumers who sublease the vehicles allegedly pay a fee ranging from $1,000 to $5,000 or more, depending on the value of the vehicle.
    Preate said vehicles transferred through Qinyan remain registered to the original owner or lessee, even after the consumer who subleases the vehicle pay the brokerage fee and takes possession of the vehicle.
    In several cases, the suit alleges, consumers who subleased vehicles failed to make timely payments on the vehicles.  The defendants failed to guarantee or make defaulted payments current in these cases and refused to provide information to the original owners regarding the location of their vehicles, the suit charges.
    The suit alleges that the defendants are violating the state law by failing to tell their clients that:
    -- A sublease agreement may violate the original financing or lease agreement, creating the potential for the vehicle to be repossessed by the creditor or lien holder even if the sublessee is making the payments.
    -- The original owner or lessee may be liable for all non-moving traffic violations incurred by the person subleasing the vehicle and may have insurance liability if the sublessee is involved in an accident.
    The suit also alleges that the defendants haven't obtained broker licensing as required by the Board of Vehicles Act.
    Preate said the suit was filed by Deputy Attorney General Nora A. Dowd of the Bureau of Consumer Protection's Philadelphia office.
    The suit asks the court to impose civil penalties against the defendants and to order them to stop doing business and pay restitution of more than $85,000 to five consumers who have filed complaints with the bureau.
    /delval/
    -0-                        11/1/91
    /CONTACT:  Robert R. Gentzel of the Attorney General's Office,  717-787-5211, or, home, 717-774-4325/ CO:  Office of the Attorney General ST:  Pennsylvania IN: SU: MP -- PH008 -- 0158 11/01/91 11:02 EST
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Publication:PR Newswire
Date:Nov 1, 1991
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