BMWABC News reported on Oct. 26 that it had an "exclusive" report on problems with BMW (BAMXY) vehicles that could suddenly lose power due to defective high-pressure fuel pumps (HPFP). That's a story I broke over three months ago on DailyFinance. But no matter, at least the ABC story appears to have sparked BMW into announcing it would recall 151,000 vehicles affected by the HPFP problem and replace their fuel pumps and add new software.

(I hope that solves the problem, but two BMW owners I spoke with for my original reporting on this problem in July had their fuel pumps replaced, and it didn't fix the issue. Both owners eventually sold their vehicles back to the manufacturer. Perhaps BMW has a solution now that will work.)

While BMW has finally admitted the need for a recall (earlier, it had not done so despite numerous customers' complaints about the fuel-pump problem), the ultimate-driving-machine-maker now also faces a related charge: that it's buying back these vehicles from owners and reselling them without disclosing their sordid history. That's according to Robert Silverman, founding partner of law firm Kimmel & Silverman in Ambler, Pa., who's representing many current and former BMW owners.

Silverman alleges that BMW has been buying back these vehicles and reselling them with titles that don't reveal to the new buyers that the cars were bought back and the specific reason why they were bought back. Silverman says that results in a so-called laundered title.

Lemon Laws and "Branded Titles"


To understand what a laundered title is, a little background on lemon laws is needed. These are state laws (every state has one but the provisions differ) meant to provide a remedy to consumers of vehicles that repeatedly have mechanical problems that cannot be fixed -- known as lemons. Starting in 1996, one such remedy was to give consumers the chance to sell back their lemon at full purchase price to the manufacturer. But some manufacturers responded to this by reselling the bought-back lemons without disclosing this fact to the new buyers.

To counteract this, many states introduced a new legal requirement that manufacturers disclose to potential buyers a vehicle's status as a repurchased lemon. This disclosure -- which is supposed to be on a separate piece of paper in big letters -- is called a "brand." And the seller's obligation to provide a potential buyer with a so-called "branded title" is required in many states through their lemon laws.

For example, New Jersey's Lemon Law: N.J.S.A. 56:12-1 requires the seller to display prominently to the consumer the fact that the manufacturer bought back the vehicle because it was a lemon. Specifically, the New Jersey law requires that the seller display the following message: "NOTICE OF NONCONFORMITY IMPORTANT: THIS VEHICLE WAS RETURNED TO THE MANUFACTURER BECAUSE IT DID NOT CONFORM TO THE MANUFACTURER'S WARRANTY AND THE NONCONFORMITY WAS NOT CORRECTED WITHIN A REASONABLE TIME AS PROVIDED BY LAW."

"No Problem"?

A laundered title is one where that branding has been removed. For an example of a laundered title, let's look at the case of Allison Mangot, the original source for my July story about the defective HPFPs and who was featured in Nightline's story. According to Mangot, her husband's BMW 335i (VIN: WBAWL73529P473918), purchased in New Jersey, had a slew of repairs -- replacing tires, turning off the check-engine light, reduced power and finally complete loss of power -- before BMW bought it back with a check for $12,600 marked "cash settlement for fuel pump related issues" that she received on Aug. 7, 2010.

But the title for that vehicle, which was resold after BMW bought it back from Mangot, does not disclose the lemon buyback. Instead, it lists the vehicle's condition as "(used) excellent." The CarFax report for the 335i indicates that its title had "no problem." And that could present legal problems for BMW because New Jersey state law requires the title to be branded, which it clearly was not.

BMW's Tom Kowaleski responded to a request for comment by noting that the carmaker had made a recall announcement and declined to comment on the laundered titles issue. Said Kowaleski: "Our recall announcements went out at 11:30 this morning [Oct. 26], and you can obtain them at www.BMWUSANEWS.com. As to your other question, you ought to talk to Robert Silverman."

And indeed I have. Silverman claims that in the "numerous" laundered title cases he's working on, BMW or an auction firm has resold these vehicles as "certified pre-owned." Silverman believes that such conduct is "illegal, unethical and immoral because the sellers aren't telling the buyers that those vehicles are lemons."

Silverman advises that if you happen to be in the market for a used BMW turbocharged vehicle, model year 2007 to 2011 (the models with the defective fuel pumps), don't buy it until the seller shows you the car's entire repair history.

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sgi4side

Unfortunately BMW is still doing this. I recently purchased a 550I in IL with clean title. I brought the car to CA, the new title was branded as lemon buy back. I guess BMW took the car out of CA where it was originally lemon and cleared the title.

February 01 2014 at 9:44 AM Report abuse rate up rate down Reply
whynot131769

This is not a recall, this is a way for BMW to get the media and owners off thier back. They are "recalling" about 130,000 cars with the fuel pump, and expect to replace only about 40,000 of the pumps. Why? FIrst of all there are a few more than 130,000 cars with the defective part, and how did they come up with the 40,000 they will replace? Seems like all the cars that have the part should have it replaced. This is a repeat of the dance they did a couple years ago. A good reporter would make the connection between 29.2 and the fuel pump issue and realize they are related.

November 01 2010 at 1:29 AM Report abuse rate up rate down Reply
Rich

its absolutly not true some yupie scum bag teabagger bought 1 and bitched like a baby what a jack wagon

November 01 2010 at 12:23 AM Report abuse rate up rate down Reply
buckntruckn

I own a 2008 535xi wagon with 56K miles of so-so reliability... Actually, the reliability is poor when compared to the several Japanese cars I have also owned. Beginning at 2K miles with a complete system failure while in upper Minnesota, requiring a full week to repair, the vehicle has had almost every calamity that the owner's manual's carefully worded prose spells out. For instance, should you let the battery run down more than 21 days you will need to replace it. This is not covered under warranty and costs $250 unless you raise h**l with the service manger. Spelled out in the book. Or, it is possible to damage the runflat tires by driving over railroad tracks/potholes. Again no warranty and $400 a pop. Happened 3 times in 15K miles before changing to regular tires. No compensation from BMW on this one. Again, spelled out in the owner's manual under high performance wheels/tires considerations. I never thought I would need to read an owner's document as carefully as a lawyer would. Now to the current problem in the article. This occurs with regularity on my car. Telling the dealer service personnel evokes "nothing in the trouble codes". Here the dealer usually asks the question about the grade of gas I put in it, and the manual once again spells out the need for quality fuel. On the freeway it is "fun" to watch the dash light up and the car to slow down, or, on a mountain pass have it just slowly grind out the few feet to a place you can turn off. Whee what fun. You have to shut off the engine and restart it maybe several times to clear the condition in my case. Unfortunately, the car of my dreams has become the proverbial nightmare and I will await the letter from BMW to take it in once again. Looks like my next car will be from the land of the rising sun, or Detroit....Who knows but it won't be from Germany.

October 30 2010 at 8:10 PM Report abuse +1 rate up rate down Reply
tyler

Crooks dressed in nice clothes will always bamboozle us.

October 30 2010 at 12:34 PM Report abuse +3 rate up rate down Reply
wllthompson8

i have a bmw which is 7 years old.i bought it when it was 3 years old .i have never had a problem of any kind with this car . as i understand it,they did have some problems with the 2002 modelbut they added another 50,000 miles to the warrenty and and additional year .i always buy used and have had 3 in the last 22 years .probably as a good a car company as there is in the world .i drove gmc cars for years and they were designed to get rid of in 2 or 3 years and were good for no more tha 50-75,000 miles .

October 30 2010 at 11:36 AM Report abuse rate up rate down Reply
simons776

Not just BMW, even Mercedes have had hundreds & hundreds of problems. I had a 2003 E320 & this car spent 60% of it's life in repairshops being fixed. It had all sorts of electrical problems & at the end I got fed up & got rid of it.I did some research & found out that my can wasn't unique in that respect & all the cars in that model year & up to 2005 had numerous problems with all kind of things both mechanical & build quality. Sinced then I have decided that I will not buy another German car because they charge very high prices for something that is just not built to last & for years they have brainwashed us with being superior cars commanding higher premium prices where in fact that is not true at all. Actually a Huyndai has a better quality & is much better built mecahnically than a BMW or Mercedes. I'm sticking with American built cars as they have improved vastly in the last few years. Not because I'm biased, because it's a fact. THEY ARE!!

October 30 2010 at 11:29 AM Report abuse +1 rate up rate down Reply
Michael Caruso

Actually there are, under different state laws ways to avoid branding the title. Under NY law the title is branded only when a consumer takes the manufacture to the mat via the arbitration process to buy the vehicle back. If the manufacture is proactive and moves quickly when a owner has a reacurring problem and labels the buy back has a customer accomidation, the title does not have to be branded and all they have to do is eventually cure the issue and they can resell it at auction without any disclosures. When the laws were written, the authors (law makers, manufacture's laywers,and dealer associations) never really gave much thought to what to do with these many vehicles that would be bought back. They should have. There is always a market and as we say in the business "a butt for every seat." If a manufacture is so sure that they have repaired the defect that cause the customer to return the vehicle in the first place, then there are two thing that should be done. First, identify the vehicle as a factory buy back (to both the dealer when he buys it at auction, and thus have the dealer do the same on his used vehicle lot). Secondly, the manufacture should warranty that issue for the life of the vehicle (if the new owner does the prescribed factory maintenance). Of course, branding the vehicle will reduce the market value of the vehicle but the extensive garrantee that the "problem is cured" will make it marketable again and thus the only issue is the price, and the market itself will take care of that. It's almost the same issue of selling rental fleets. The market always felt those vehicle were worth less than a one owner vehicle, thus lower prices to the public who did not mind the mulitable drivers and wanted a bit better deal.

October 30 2010 at 11:20 AM Report abuse +2 rate up rate down Reply
dianeklepper

I am tired of the Car magazines raving over the German Cars as the greatest vehicles ever made. I have driven the 3-series BMW on numerous occasions (a car that many auto journalists keep drooling over) and have always been underwhelmed. First, if you are tall and/or stout, it is very cramped. The pedals are too close together, and you have to rev the hell out of the engine to get any torque. And the psucho who came up with idrive should be shot. I have also driven some Mercedes Benzes, and although they are nice to drive, everyone I know who owns them, has expensive repair bills that come way too often. A good friend of mine has owned 4 MBs and each one was a lemon. He then bought a BMW 3 series, and was so disappointed, he gave it to his wife (and she very rarely drives it). He now owns a Chrysler 300 (and this is from someone who used to say Never Buy American). It is the best car he ever had.

October 30 2010 at 11:13 AM Report abuse +2 rate up rate down Reply
joejteacher951

The Ultimate Driving Machine?

October 30 2010 at 11:06 AM Report abuse +2 rate up rate down Reply
1 reply to joejteacher951's comment
wllthompson8

yes

October 30 2010 at 11:37 AM Report abuse -1 rate up rate down Reply