At some point, you may encounter an unhappy customer which can sometimes result in a lawsuit, starting with a demand letter.  If you receive a letter like this in mail, don’t ignore it.  It is best to reach out to an attorney for legal advice on what your options are and how you can handle it moving forward.

What is a demand letter?  A demand letter is written correspondence from someone (usually a customer) who is seeking a remedy for a wrongdoing that you or your dealership may be responsible for.  The purpose of the letter is to inform you that there is a problem and allow you time to either dispute it or take action to fix it.  The most common demand is for damages (money) that the sender believes they are entitled to.  Unless specified in the letter, you have 30 days to respond to either meet the demands or dispute it further.

If you feel that the claim in the letter is warranted and wish to remedy it, simply arrange to meet the demand (pay the amount asked for in the letter if specified) plus a surcharge of the lesser of $500 or 10% of the damages in the claim.

However, if you believe the claim in the letter has no basis or is unreasonable, then immediately contact your legal representative so they can assist you.  Keeping diligent records and using up to date forms combined with best dealer practices can help avoid mistakes and errors that could lead to future claims against you and your business.

Keep in mind that a person cannot simply drop off a note or send an email asking for money or they will sue.  A demand letter needs to have specific elements outlined in Section 501.98, Florida Statutes.  These include the proper contact information for you and/or your dealership as and for the person bringing the claim, a clear account of facts around what caused the claim, why they feel entitled to damages, the amount of money they are seeking (or other form of remedy if they are not seeking payment), as well as being delivered by USPS or another nationally recognized carrier with a return receipt requested.

Specifically, 501.98 (9) reads:

This section applies only to civil litigation, including arbitration, arising out of a transaction for which the dealer has proved the following written notice to the consumer, which must be acknowledged by the consumer, and which must be in a font size no smaller than that of the predominant text on the page in which the notice is disclosed, or if it is disclosed by itself, in a font size of at least 12 point:

Section 501.98, Florida Statutes, requires that, at least 30 days before bringing any claim against a motor vehicle dealer for an unfair or deceptive trade practice, a consumer must provide the dealer with a written demand letter stating the name, address, and telephone number of the consumer; the name and address of the dealer; a description of the facts that serve as the basis for the claim; the amount of damages; and copies of any documents in the possession of the consumer which relate to the claim. Such notice must be delivered by the United States Postal Service or by a nationally recognized carrier, return receipt requested, to the address where the subject vehicle was purchased or leased or where the subject transaction occurred, or an address at which the dealer regularly conducts business.

As a dealer it is your job to make sure that you are delivering the notice (above) in writing to your customers, and to make sure they sign and acknowledge the disclosure at the time of the sale.  When you have this language in your contract the customer must strictly adhere to the rules and timeline in this statue.

Lastly, please note that burying a letter like this under a mountain of paperwork on your desk is one of the worst things you can do.  Failing to answer the letter in the specified time frame will likely result in legal disputes, the initiation of arbitration or a lawsuit and could potentially cost you or your business money in the form of legal fees in addition to any potential claims against you.