The Consumer Leasing Act (CLA) is a federal law in the United States that governs consumer leases of personal property, including cars. The CLA requires lessors (the companies or individuals that lease property to consumers) to provide certain disclosures and protections to lessees (the consumers who lease the property).
One of the requirements of the CLA is that lessors must disclose all fees and charges associated with a lease, including any fees that are considered “illegal.” Illegal fees are charges that are not allowed by law, or that violate the terms of the lease agreement or the CLA.
Examples of illegal fees in car leases might include:
- Fees not previously disclosed in the lease that are charged at lease buyout. Examples include “documentation fee,” “dealer fee,” “electronic filing fee,” and “processing fee.”
- Fees for excessive wear and tear: Lessors may charge lessees for excessive wear and tear on a leased vehicle, but these fees must be reasonable and reflect the actual cost of repairing the damage. If a lessor charges an unreasonable amount for wear and tear, or charges for damage that is considered normal wear and tear, these fees could be considered illegal.
- “Security” deposits: Some lessors may require lessees to pay a security deposit at the beginning of a lease. However, the CLA limits the amount of the deposit to no more than two monthly payments and requires lessors to refund the deposit (or any portion of it) at the end of the lease term, unless the lessee has violated the terms of the lease.
- Excessive mileage fees: Many car leases include limits on the number of miles that the lessee can drive the vehicle without incurring additional fees. However, the CLA requires lessors to disclose these mileage limits and the associated fees in the lease agreement, and the fees must be reasonable and reflect the actual cost of excess mileage.
If a lessor charges an illegal fee, the lessee may have legal recourse to challenge the fee and seek compensation. In fact, the CLA provides for up-to $2,000 in statutory damages under most circumstances—even if you did not pay the fee—as well as a refund of any illegal fees you did pay, as well as the payment of your attorney’s fees and costs in a successful case.
The attorneys at PKG are experienced in litigating and settling such CLA claims and have represented dozens of consumers for such cases throughout the United States. If you have been quoted illegal or unexpected dealer fees or other purchase fees that are not covered in your lease, do not hesitate to contact us at info@pkglegal.com or at (561) 726-8444 for a free evaluation of your claim.