Ford swapped her Explorer due to Lemon Law — then threatened to list new one as stolen

Phoebe Wall Howard
Detroit Free Press

Kristina Nikolaides paid Ford Motor Co. $22,000 through her bank's autopay system and now she's trying to find out what happened to the money.

After she struggled to find answers to that and other questions, a Ford representative threatened in writing to report to police that Nikolaides' 2019 Explorer has been stolen — a vehicle on which she had made $700-a-month payments without interruption.

"This is a nightmare," she told the Free Press. "Nobody should have to go through this."

Nikolaides was still seeking answers as recently as Friday from Ford Motor Co. and Ford Motor Credit over the unsolved mystery.

Ford said it's all a big misunderstanding that soon will be fixed.

The company declined to comment on what Nikolaides and her legal advocate describe as "abusive" treatment by Ford.

Kristina Nikolaides, 41, is a school teacher from Dedham, Massachusetts whose experience with Ford Motor Co. and Ford Credit were labeled "abusive" by the state attorney general's consumer assistance office. She is seen here on July 2, 2019 in Myrtle Beach, South Carolina.

Sally Fleschner, a representative of the Massachusetts Attorney General's Consumer Assistance Office who has intervened on behalf of Nikolaides, told the Free Press the situation involving Ford is "particularly disturbing."

Nikolaides, a 41-year-old school teacher, lives near Boston in Dedham. The Free Press interviewed parties involved and reviewed voicemail and video recordings, plus nearly two dozen sets of documents and emails tracking the sale, repairs, loan agreements, payment problems, insurance coverage and threat of police involvement.

Here's what the paper trail shows happened to Nikolaides:

  • She purchased a 2018 Explorer in February of that year for about $54,000. Its defects included a cabin filling with smoke when idle.
  • Ford traded the "lemon" in March 2019 for a 2019 Explorer. Nikolaides signed paperwork at Jack Madden Ford in Norwood, Massachusetts, that she understood transferred her car loan with the same terms and conditions. She went home with a new SUV.
  • She made payments uninterrupted on what she assumed was the 2019 Explorer. 
  • In February, she was contacted by a representative of "FordRAV," which Ford confirmed is part of Ford Motor Co. FordRAV stands for "Ford reacquired vehicle," a service run by a Saginaw-based company known as Morley. It manages reacquired vehicles for automakers. Nikolaides at this point was told the original paperwork on the lemon trade wasn't done properly. Her signature is needed on new paperwork.
  • She signed the paperwork but crossed out the word "forever," which she noted was not part of her original loan agreement. It used the word "forever" in terms of her commitment to Ford. She returned the paperwork on March 3.
  • The FordRAV representative called and emailed, saying if the paperwork isn't signed, the 2019 Explorer will be reported stolen.
  • Ford Motor Credit sent another form without the word "forever." It was signed and returned.
Kristina Nikolaides, a school teacher from Dedham, Massachusetts, swapped a lemon 2018 Ford Explorer for a 2019 Explorer. Nearly two years later, she was contacted by the dealership and told loan paperwork was done improperly. She pointed out that the updated  contract had different language and declined to sign it. Nikolaides had to fight. Then Ford Motor Credit re-did the contract, but not before a subcontractor acting on behalf of Ford threatened to report her SUV stolen.
  • On March 23, Ford Credit informed Nikolaides that FordRAV had paid the remainder of her loan in full. The letter congratulated her for becoming the owner of the long departed 2018 Ford lemon. Meanwhile, her 2019 Ford sat in her driveway, insured and licensed.
  • Her ownership status of the 2019 vehicle was unknown and she had no idea where the Ford lemon might be, or who had the $22,000 in car payments.
  • On April 5, she called Ford Credit because her car payment hadn't been deducted from her account. She wanted to pay. "Andrew" on the Ford Credit chat line said her account had been closed. Nikolaides took a screenshot of the chat as evidence.
  • She mailed a payment by check to show Ford Credit she is acting in good faith.

"Until March of this year, no one ever informed her that the substitution transaction was invalid," Fleschner wrote to John Mellen, Ford general counsel, on April 7. 

The Ford customer "has been subjected to abusive treatment by employees or representatives of your companies," the three-page letter said.

This April 18, 2019 receipt from Jack Madden Ford in Norwood, Massachusetts shows the $50,708 purchase of a new Ford Explorer purchased by Kristina Nikolaides. Nearly two years later, Ford contacted her saying the paperwork was incomplete and she didn't own the car. She had never missed a car payment.

Nikolaides has "suffered extreme emotional distress due to the outrageous ineptitude and malice of your company and its subsidiaries and contractors," Fleschner wrote. 

Ford declined to provide the Free Press with a response to any details of the case, including the threat to report a customer to police for being in possession of a vehicle for which the consumer has never missed a payment.

Even now, Ford has not confirmed in writing to Nikolaides that the police won't be called or that the Ford Credit account will be reopened or whether the lemon Explorer is still in Nikolaides' name or where it has been, Nikolaides said. She does not have documents confirming her $22,000 has been applied to the car in her possession.

"They sent me a letter saying I now owned the 2018 Explorer, not the 2019 Explorer," she said. "I had a purchase and sale agreement for the 2019 Explorer. It is insured. And now I'm wondering, 'Is the other car in my name? Am I liable?'"

Where did the $22,000 go? 

A Ford lawyer called Fleschner on Thursday morning, she said. 

"I said, 'Someone needs to make this right,'" Fleschner told the Free Press. "The lawyer at Ford, a woman called me. She needs to find out where the $22,000 went and apply it to the 2019 Explorer."

Ford told the Free Press there is no need for concern. 

"A customer in (Dedham) Massachusetts had an issue with her vehicle, which Ford replaced at no additional cost to her," company spokesman Ian Thibodeau said on Friday. "Separately, we learned paperwork hadn’t properly been updated to reflect the new vehicle, as well as related problems, and we’re now resolving those issues for the customer."

But things aren't resolved, Nikolaides explained.

"Every day, I have to wonder, is my car going to still be here? Am I going to go into a store and come out and not find my car?" she said. "They threatened me. My brother, who's a detective in our town, has been running my plates to make sure it's not reported stolen. If I'm pulled over with a car reported stolen, I could be arrested. They've put that threat out there. I have to live with that threat."

The idea of needing a lawyer to defend herself if arrested is scary, she said. "I feel like I'm being treated like a criminal. I haven't done anything wrong."

Kristina Nikolaides swapped a lemon 2018 Ford Explorer for this 2019 Explorer in April 2019. After paying on the Ford Motor Credit loan for nearly two years, she was told she didn't own the car because paperwork was mixed up. She expressed concern that her name had remained on a vehicle she surrendered to the dealership, she said.

The Explorer is Nikolaides' second Ford. She owned a 2012 Edge. Her mom has a Flex. Her dad drives an Explorer. Her brother just sold his F-150 Raptor. Her boyfriend drives an Explorer. 

"I’ve never missed a payment. I’ve never been late," Nikolaides said. "And my whole family drives Fords."

'Exceptional service'

The Morley website says its reacquired vehicle management services are "specifically designed to help clients save money through process innovation, and ultimately save customers through exceptional service. We manage the complete process or individual process steps based on our clients’ specific needs."

After hearing the facts of the case on Thursday, Jill Gushow, general counsel and compliance officer at Morley, said she would look into the matter. The president of the company, Paul Furlo, asked her to follow up on a voice message. Gushow said it was the first she had heard of the situation.

When pressed for an explanation, Gushow did not respond.

'Need to be reported stolen'

After three months of confusion, Nikolaides said she is most alarmed by the exchange she had with Jennifer Murringer, who identified herself in emails as a disposition coordinator at Ford Reacquired Vehicle Headquarters.

Nikolaides said Murringer first informed her the 2019 vehicle to which she had been given keys would be reported stolen if Nikolaides didn't do as she was told. That struck Nikolaides as so bizarre that she emailed Murringer after the call to get confirmation of the exchange in writing. At issue was whether the process of swapping the lemon Explorer for a functional Explorer had been legitimate.

Murringer replied on Feb. 8 at 4:45 p.m.:

"When I spoke with you today, I let you know that Ford Motor Credit was not able to change the wording on the SOC (Substitution of Collateral Agreement) Document that you do not want to sign to complete this case. I told you if you are not willing to sign the SOC Document that Ford Motor Credit needs you to sign, the new vehicle would need to be reported as stolen and the 2018 Ford Explorer would have to be returned to you. This is due to the payments being made on the original vehicle as the document from Ford Motor Credit was not completed and therefore, you are still the owner of the 2018 and not the 2019. Until that documentation is completed, the dealership owns the 2019. I told you that is what I was being told by my supervisor."

The Ford dealership and another company that handled the case failed to complete necessary forms needed by Ford Credit to process the trade in 2019 at the time Nikolaides "surrendered" the 2018 Ford Explorer, Murringer wrote. "… (We) are not able to get the title for the 2018 Ford Explorer from Ford Credit."

While acknowledging customer "frustration," Murringer said, "without your cooperation, we will have to look into other options we have to settle this case."

Nikolaides was baffled. And she felt the threat was anything but subtle.

She simply couldn't understand any of it.

Kristina Nikolaides returned this 2018 Ford Explorer to the dealership after owning it a year because it had so many unfixable problems, including smoke inside the car when the vehicle idled.

At 9:13 a.m. Feb. 11, another email arrived from Murringer that said: "At this time, the lender has your original vehicle on file; all payments being made currently are towards the original vehicle that you are no longer in possession of. Once your auto loan is paid in full, they will be sending you the title for a vehicle that is no longer in your possession as your current vehicle is not on file with them."

Nikolaides was stunned, she said. Thousands of dollars paid. Records all mixed up and she was forced to pull together emails and files and documents to prove the truth.

After three months of struggle with Ford Motor Credit, a representative wrote Ford customer Kristina Nikolaides and apologized for the inconvenience and stress, offering $100 as a token of the company's appreciation.

At 9:53 a.m. Feb. 11, she wrote FordRAV, "... now thinking of the liability Ford has created by not completing this paperwork at the time of transfer (4/19/19), a vehicle with my name and my information has been out of my possession and could have been used for almost anything and I would have been liable as the technical 'owner' of the vehicle (2018 Ford Explorer)."

That lemon Explorer, Nikolaides said, would not just smoke but produce "billowing purple smoke and noxious fumes that filled the car after you let the car run about 20 minutes. It just engulfed you." She provided video to the dealership at the time.

On April 2, a man named John Ball sent a note of apology from Ford Credit and offered Nikolaides $100 for her stress. She was offended. And still has no resolution.

Kristina Nikolaides took a screenshot of her chat with Ford Motor Credit on April 5, 2021. She tried to make her April car payment on her 2019 Ford Explorer and the company told her the account had been closed.

"This is the first time in my life I’ve ever been financially secure. I don’t own a house, this is what I own. My Explorer," Nikolaides said. "I’m paying toward owning this. My credit has been great. I'm able to buy a car with decent interest rate and everything. And this is my experience."

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It seems Ford doesn't understand "basic contract law," Fleschner said.

"The substitution transaction was completed in 2019, and in fact the SOC (Substitution of Collateral Agreement) form states, 'You the buyer ... have entered into the contract ... described below for the purchase of property,'" Fleschner emphasized in an email to the Free Press on Sunday. 

'Ford had no right to do this'

"This means that the contract was entered to at the time of the substitution, and both parties were performing their part. Kristina made her payments. Ford gave her a 2019 Explorer. Ford cannot come back two years later and try to change the terms of contract. That is basic contract law," Fleschner said. "Morley did not have a legal right to ask Kristina to sign the form. The other legal point is that the form Kristina signed crossing out the word 'forever' was valid. All Ford had to do was initial her change and put the document in their file."

Despite attempts to explain, the Ford lawyer insisted a new form was necessary, and the process threw everything into chaos, Fleschner said. "This lawyer said the contract was not complete. That's not true. Legally, Ford had no right to do this. They took her money and gave her the car and she made the payments."

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Contact Phoebe Wall Howard at 313-222-6512 her on Twitter@phoebesaid. Read more on Ford and sign up for our autos newsletter.