Soldier sues Lithia dealership for ‘yo-yo’ scam on Harley

Army Specialist Austin Deehan has sued Chevrolet of South Anchorage, a Lithia Motors dealership in Alaska, for selling him a 2014 Harley-Davidson motorcycle and allegedly backtracking on the financing.

“Lithia attempted the tried-and-true ‘yo-yo financing’ scam with Specialist Deehan,” according to a Dec. 3 filing with the Superior Court for the State of Alaska. “This scam is a bait-and-switch tactic used by many car dealerships in Alaska and throughout the country to cheat unsuspecting consumers out of more money.”

According to the court filing, Lithia informed Deehan that Alaska USA Federal Credit Union had approved a $10,630 loan for 60 months at a 4.25% APR. Deehan made a $2,599 down payment on Aug. 20 and took possession of the motorcycle. When Deehan failed to receive the loan documentation from the dealership, he reached out and was told by the Lithia sales representative that he “never had a loan to begin with,” the document noted.

Ultimately, Deehan was informed by the dealership that he could “either agree to a loan with another bank at a higher rate or bring the motorcycle back and Lithia would keep his entire down payment,” according to the filing.

The Federal Trade Commission has set its sights on yo-yo financing, also known as “spot delivery,” said Maricela Segura, regional director of the FTC’s Los Angeles office. “The FTC Act prohibits deceptive or unfair practices in — or affecting — commerce,” Segura said. “When we look at what’s deceptive, we consider whether there is a misrepresentation that was material to consumers’ buying habits.”

Though Chevrolet of South Anchorage General Manager David Raff declined to address Deehan’s complaint specifically, he defended the business’s practices, according to a published report.

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