FOR IMMEDIATE RELEASE:
April 1, 2003

FOR FURTHER INFORMATION CONTACT:
Genene Morris (973)504-6327

NEWARK - First Union Auto Finance, L.L.C., has entered into an agreement with New Jersey to resolve concerns that it violated New Jersey's Consumer Protection Leasing Act in connection with lease-end transactions, Acting Attorney General Peter C. Harvey and Consumer Affairs Director Reni Erdos said.

Under the terms of the agreement First Union has agreed to comply with New Jersey's consumer protection laws, follow a complaint resolution process for all future consumer complaints and pay the State $350,000 in costs, attorneys fees and consumer initiatives. First Union is a subsidiary of North Carolina-based Wachovia Bank, N.A.

The agreement amicably resolves an investigation by the State into allegations that First Union engaged in multiple violations of New Jersey's Consumer Fraud Act ("CFA") and Consumer Protection Leasing Act ("CPLA").

Specifically, New Jersey's investigation centered on allegations that First Union failed to return security deposits within 15 business days to lessees who turned in vehicles at the end of their lease agreements with First Union and failed to send invoices charging consumers for "excessive wear and damage" within 10 business days, as required by the CPLA.

First Union cooperated with the State's investigation and has made no admissions of liability or wrongdoing.

"We are pleased we were able to resolve the issues raised in our investigation and establish an agreement that will ensure compliance with New Jersey's consumer protection laws," Acting Attorney General Harvey said.

"The agreement we're announcing today is designed to ensure that consumers can move on with their lives and are not left waiting inordinate amounts of time to be billed for "excessive wear and damage" charges and/or given their security deposits," Director Erdos said. "Ultimately, our goal of ensuring that lessors are treated fairly by First Union has been met."

Under the terms of the agreement, First Union will:

• mail excessive wear and damage charges to lessees within 10 business days of the vehicle's return;
  
  
• contact each lessee, on at least two occasions prior to end of a lease, with information concerning a reasonably convenient location for the proper return of the vehicle;
  
  
• provide consumers with a statement informing them of their right to obtain at the end of the lease term, at the lessee's expense, a final and binding professional appraisal by an independent third-party appraiser;
  
  
• return security deposits due to lessees within 15 business days;
  
  
• contact each lessee approximately two months prior to the scheduled maturity date of each lease to notify them of its offer for a pre-termination inspection of the vehicle at no cost to the lessee. The inspection process, to occur no more than eight weeks nor less than one week before the termination of the lease, will afford the lessee opportunity to have identified and to conduct any repair to the vehicle prior to the maturity of the lease.

Also, under the terms of the agreement, Consumer Affairs will forward all complaints it receives against First Union Auto Finance, L.L.C., to the company. Within 30 days of receiving complaints from Consumer Affairs, First Union will write to each complaining consumer. If First Union's response disputes the consumer's complaint or relief sought, First Union must provide a description of facts and, if appropriate, copies of documents supporting its position. If First Union does not dispute the complaint or relief sought, it must provide consumers with all documents necessary and appropriate to satisfy the consumer's complaint, including payment or credit. If Consumer Affairs does not receive notice from First Union that a forwarded complaint has been settled on or before the 45th day after the complaint was transmitted to First Union, the complaint will be forwarded to Consumer Affairs' Alternative Dispute Resolution Unit for binding arbitration.

Deputy Attorney General David M. Puteska of the Division of Law is handling this case for the State.