Transcript for Beware the Car Dealer Yo-Yo
Reporter: At a used car lot in ft. Wayne, indiana, a woman by the named of jenee smith heads to a showdown meeting where the salesman he says tried to take advantage of her, to gouge her. With her on this day is one of our producers and they're both wearing hidden cameras. What jenee smith wanted us to see and catch on camera is what consumer groups saying is a growing problem for car bias all across the country. Who is this? Ned, I'm a friend. Okay. Reporter: Jenee smith ended up at this used car dealer in the first place because she had some serious credit problem. My credit wasn't that great. They work with people that have credit issues. Es, they do. Reporter: She was able to drive off the lot with the car she wanted, a pt cruiser. But about a week later after she had shown after her new car to friends and family, she was told the deal was off. I figured once I signed the contract and they signed it, the deal was done. Reporter: But she was told the financing fell through, and she had to put down $300 more if she wanted to keep the car she had fallen in love with. So we can do a new contract, a new deal for you and it's going to be through this. Reporter: The salesman had no problems talking to a man she introduced as her friend, our producer. I really don't want to talk to you, sir. You don't have anything to do with this, honestly. Reporter: What jenee smith was being told is that often when buying a car a deal is not necessarily a done deal. It is a practice known to people in the car business as a yo-yo. The name for the ever popular children's toy, out and back and all around. Something to marvel about with this teenage champions. When the same business is applied in the car business, the consumer says buyer beware. The car comes out, the car comes back. Reporter: We learned all about it from earl stewart, a palm beach car dealer who other car dealers hate because he's made it his mission to expose what goes on behind the scene. I know all the tricks of the trade. I've been there and done that. Reporter: It's been a popular practice for dealers to allow drivers to drive off with a car before financing is complete. These are for the people that are the most vulnerable. Reporter: In oklahoma city we followed a young woman who says she was yo-yoed when she bought a nissan versa. The dealer said the car had to come back. In the beginning everything was fine. The payments were where I wanted them to be and I drove off with the two that night. Reporter: Two days later the dealer called to tell her the financing had fallen through and she had to sign a new contract if she wanted to keep the car with an expensive extra for a warranty. The finance person told me i have to go with a $2,000 warranty on the car. They say the deal fell through because she had lost her job and the customer wanted the warran warranty. The dealer admitted that's extra thousands of dollars of profits for them. The dealer is one of oklahoma city's best known which says it prides itself for being reliable. They have been honest with me. That's not what victoria says was her experience and she wore a hidden camera to let us see how she was treated there. Nervous? A little bit. Let's go. Reporter: She told the salesman she did not want to sign a deal, she just wanted them to return the car she traded in. Tell me where my car is. It's sold. Where? How did you seen sell my car? How did that happen? Reporter: A good question. In the same contract that used a lot of lawyer's language to make the sale conditional, the language also states that the dealer cannot sell offer the trade in car until the sale is completed. Her lawyer says it is illegal to do otherwise. In a motor vehicle or spot delivery agreement in oklahoma, if they don't hold onto that vehicle until they've achieved financing then they are violating the law. Reporter: They did not and LaTOYA WAS STUCK AND MAD. I want my pt cruiser. We don't have it. Where is it? We sold it. It's probably in a different state. Not the case. We found it less than an hour down the road in a whole sale car lot. WHEN WE brought LaToya here to see it she was moved to tears, now with no car. I'm green behind the ears when it comes to cars. Reporter: A lawyer told us that selling the trade in car was one of a number of mistakes that were made and that the deal did not go down pursuant to hudiburg standards. LaTOYA HAS NOW FILED A LAWSUIT Against the dealer alleging fraud, something the dealer strongly denies. At the federal trade commission in washington, mallen admits she's no expert in yo-yo but the yo-yo practices of car dealers. Yo-yo might sound like it's making light of the term but it's showing you the whole jerking the consumer back and forth issue that we're concerned about. Reporter: She told us that dealers can't get away with it if consumers aren't told in advance the sale is conditional. Companies cannot shield themselves from liability by having fine print that consumers can't see or understand. Reporter: Most of the millions of deals every year are completed without mistakes or misconduct, which if true must mean jenee smith was extremely unlucky. So was the salesman who we caught trying to pull a fast one on her. When she decided to mess with jenee smith, they made a mistake? Yes. They found the one that was not going to take that crap from them. Reporter: As we saw when we went back to the dealer to ask questions and brought jenee smith along. You sold her and car and now you want her to say more for it. No, that's not true. They call that yo-yo financing. The salesman, billy hightower inconsisted the finance company refused to sign her loan and he had a form signed by jenee smith. She has a piece of paper that says that if the deal don't go through she had to turn the vehicle back. When I asked him to show me the form, he refused again and again. I don't have to show you. She doesn't have it. She do have it. Can you show it to me? No. I don't need to show you anything. Then hightower started yelling at his customer and she yelled back. You handed me the keys and i drove off! Reporter: It wasn't long before the owner of mint auto sales, sam, showed up and told his salesman show us the form. Buyer agrees that the delivery of the motor vehicle this is a sale contract condition upon approval. Reporter: Still he refused to let me see it to see if she had in fact signed it. Why don't you show it to me. Give it to him. I don't care. I've got nothing to hide. Reporter: Finally the salesman handed it over and the truth came out. She didn't sign this. It's signed by you. You signed it, you didn't sign it. You tried to pull a fast one, sir. That's why you didn't want to show it to me. Reporter: Confronted with the facts, the owner did a quick about face promising to abide by the original deal he had made with jenee smith. Can you promise now she can have the car at the original deal. I'll do it right on tv. Reporter: Believe it or not it all ended with a hug. Should you two shake hands on this deal? Absolutely. I'll give you a hug. Reporter: We heard that the salesm salesman, billy hightower no longer works for him and has opened his own used car business across town.
This transcript has been automatically generated and may not be 100% accurate.