BBB AUTO LINE Marks a Milestone: 40 Years of Lemon Law Dispute Resolution

Jun 28, 2022 by Juan Herrera, Vice President, Dispute Resolution Programs, BBB National Programs

In the early 1980s, the U.S. automotive market was transitioning. Big, rear-drive vehicles were being replaced by smaller, fuel-injected front-wheel-drives to meet new safety and emissions regulations. At the same time, Connecticut was making legislative history by pioneering the country’s first “lemon law” to aid owners of new automobiles found to have a significant defect. Soon other states followed, and lemon laws took off across the country.  

Combined, these events created a need for a streamlined dispute resolution process that would resolve consumer complaints without costly and time-consuming litigation.   

Partnering with what was then called the Council of Better Business Bureaus, General Motors (GM) organized a grassroots effort among auto manufacturers (including Volkswagen, Porsche, Audi, and Nissan) to develop and implement a program that would provide an option for their customers to use conciliation, facilitated negotiation, and arbitration to help resolve vehicle warranty disputes.  

The out-of-court program, dubbed BBB AUTO LINE, expanded nationwide in 1982, formalizing its services to provide a full suite of in-demand services for manufacturers and their customers, including vehicle warranty, lemon law, and class action dispute resolution, all at no cost to consumers.  

Then in 1983, and again in 1988, government orders became the driving force behind the growth of the program when GM and Volkswagen/Audi each entered into consent orders with the Federal Trade Commission (FTC) regarding vehicle problems and agreed to resolve consumer complaints through BBB AUTO LINE.   

 

Shifting Gears 

By the 1990s, vehicle manufacturers continued to step up their game, implementing regulatory standards without hurting vehicle performance or reliability, using computerization to get mechanical design even more precise, and finding ways to extend the life of an engine.  

But, while vehicles were improving, the diversity and complexity of regulations in state lemon laws were creating new challenges for manufacturers in the auto industry.   

State lemon laws typically require an automobile manufacturer to replace a defective automobile or refund its purchase price if an identified defect is covered by a warranty and has not been repaired after a specified number of attempts, or if the vehicle has been in disrepair for a certain cumulative number of days. These regulations were enacted, in large part, to supplement the federal Magnuson-Moss Warranty Act, which provides standards for written warranties and allows manufacturers who provide warranties to establish independent dispute settlement mechanisms to resolve warranty disputes.  

However, lemon laws vary from state to state and, as states reviewed their own guidelines, many began making amendments with tougher regulations and establishing their own arbitration programs. 

After years of supporting manufacturers by handling mediation between consumers and manufacturers, BBB AUTO LINE stepped up to help the auto industry understand the nuances of the various state laws, and state regulators understand the issues faced by automakers.  

In 1990, BBB AUTO LINE began seeking certification from states to recognize the program, making it easier for manufacturers to meet specific state requirements and to rely on BBB AUTO LINE to ensure they were following required processes and procedures.  

As the program grew, cases were consolidated from being handled by local Better Business Bureaus to regional offices and, in 1994, a national BBB AUTO LINE Dispute Resolution Center was established.  

 

The Wheels Keep Turning 

Rolling into the 2000s, bigger became better once again. SUVs ruled and gas prices were low. Major advancements in safety and in-vehicle electronics were in the works and automotive performance was key. 

As vehicles advanced, BBB AUTO LINE was able to keep pace with changing technology, new vehicle features, and new entrants to the market to help support consumers and participating manufacturers reach resolution on disputes.  

Most claims, then and today, result in mediated settlement agreements. In some cases, issues are resolved through arbitration before trained volunteer arbitrators. Generally, cases take approximately 40 days to resolve.  

 

The Road Ahead  

Now, as we charge ahead, the auto industry is reaching an inflection point where the world of automobiles is changing dramatically.  

The current pace of innovation is staggering. Electric vehicles (EV), connected cars, hybrids, and cleaner, greener rides are propelling us forward and bringing their own challenges.  

Amidst this change, BBB AUTO LINE continues to evolve with the industry. With most of the world’s major vehicle manufacturers as partners, the program is well-positioned to provide support on a variety of emerging issues such as EV battery warranties, data privacy, and the need for revised lemon laws to keep pace. 

Through the years, the program has consistently reported high mediation success rates, resolving more than two million disputes since its inception in a hassle-free, timely, and cost-effective manner. 

Now operating as part of BBB National Programs, BBB AUTO LINE has become a trusted asset for both consumers, who appreciate access to fair, transparent, and balanced justice, and manufacturers, who say it is a critical component of preserving relationships with customers.  

As the largest and longest-running vehicle dispute resolution program in the United States, BBB AUTO LINE’s experience will drive its future course. Over the next 40 years, the need for fast and cost-effective resolution tools to mitigate litigation will persist – and extend to industries beyond auto manufacturing.  

Together, automakers and BBB AUTO LINE will keep paving the way to make neutral, mutually trusted, out-of-court resolution solutions accessible to consumers. 

 

Contact BBB AUTO LINE 

BBB AUTO LINE is proud to serve as the solution of choice for more than 20 major automakers. A team of dedicated dispute resolution specialists is assigned to handle each claim, ensuring a seamless, efficient process and a positive customer experience. Our four decades of experience partnering with automakers and implementing the program enables us to stay abreast of new motor vehicle warranty laws, information, and issues. To learn more about BBB AUTO LINE, or to open a claim, call 1-800-955-5100, or visit bbbautoline.org

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