Releases Study on Complaints : Consumer Group Wants ‘Lemon Law’ Tuned Up

A consumer advocacy group charged Thursday that California’s “lemon law,” designed to protect the owners of problem new cars, does not adequately meet the needs of all consumers and badly needs a “tuneup.”

Don Kurtz of Bakersfield agrees. His $11,000 Mercury Topaz is in the repair shop for the seventh time in six months to replace a faulty air conditioner that causes the car to overheat, Kurtz said.

“The lemon law is absolutely impotent,” said Kurtz, a salesman who has been trying to get a refund or replacement for his car under the law. “It offers the consumer no protection.”

The consumer group, California Public Interest Research Group, or CalPIRG, released a study Thursday of a small sampling of complaints about the lemon law arbitration process and endorsed pending legislation that the organization said will increase the law’s clout.

“After three years of mixed results, California’s lemon law is in need of a tuneup,” said Carmen Gonzalez, CalPIRG’s consumer program director, who conducted the group’s study. “Though some consumers have been helped by the law, far too many others have found that it is either being circumvented or ignored completely.”

The law, similar to those in at least 34 other states, requires manufacturers to make necessary repairs and to replace the car or give the customer a refund if the car cannot be fixed after a “reasonable” number of attempts.

Under the California law, a new car is presumed to be a lemon if in the first 12 months or 12,000 miles of driving it needs the same major defect repaired four or more times or was out of commission for 30 days. The consumer can be denied a refund or replacement if the manufacturer can prove that it did not have a reasonable opportunity to repair the car.

Under the lemon law, consumers may sue but first must use an arbitration process set up by auto manufacturers. In California, arbitration has been conducted by four panels: one operated by Ford; one run by Chrysler; Autoline, which is run by the Better Business Bureau and handles arbitration for 12 manufacturers, and Autocap, which recently stopped arbitrating lemon law cases.

CalPIRG contends that manufacturers have discovered several loopholes in the law. The consumer group endorsed legislation that would designate a state agency to certify arbitration programs, require arbitrators to use the lemon law criteria in rendering their decisions and allow certain fees and taxes to be considered for reimbursement.

CalPIRG’s report on 72 cases included such complaints as:

- The arbitration process often takes longer than the 40 to 60 days specified by the Federal Trade Commission.

- Decisions are not based on lemon law criteria that would grant the consumer a replacement car or a refund if the car is found to be a lemon. Instead, in more than half of the cases examined, the arbitrator ordered more inspections, repairs, extended warranties “or simply nothing at all,” the study said.

- When consumers are awarded refunds, “unreasonable” charges are made for consumer use of the car before the problem was discovered. Also, consumer costs for rental car fees and towing charges often are not awarded.

Greg Drapac, a spokesman for the Los Angeles Better Business Bureau’s Autoline, said Autoline is a national program that is not able to comply with all of the many lemon laws across the country. Autoline usually settles cases in 80 to 90 days, “which is more than state law says but is definitely less than five years, which is what the typical court case would take,” he said.

Spokesmen for the Ford and Chrysler arbitration panels could not be reached for comment.