McKenna files suit against auto dealers and marketers
VANCOUVER, Wash. (Legal Newsline) - Washington Attorney General Rob McKenna has announced two lawsuits resulting from his investigation into deceptive practices by some auto dealers and marketers.
The lawsuit, filed in Clark County Superior Court, accuses RGH Marketing of Happy Valley, Ore, and Robert G. Hubbard, Jr., general manager of Interstate Auto Liquidators, based in Vancouver, Wash., of violations of Washington's Consumer Protection Act, Promotional Advertising of Prizes Act and Dealers' Licenses Act.
"Deceptive advertising by some auto dealers and marketers has accelerated in the down economy," McKenna said.
On its website, RGH Marketing claims that it is a wholesale division of Whitney's Auto Group, which includes Whitney's Chevrolet in Montesano, Aberdeen Honda, Whitney's Value Ford in Elma, Interstate Auto Liquidators in Kelso, and Stormy's Used Cars in Elma.
"We believe that RGH Marketing promoted off-site sales at locations throughout Washington, making it appear these were special bank-ordered events," Assistant Attorney General Mary Lobdell said.
"In fact, we believe the cars were from the Whitney's Group dealers' regular inventory or were picked up at auto auctions."
The defendants are accused in the State's complaint of using terms including "Pre-Auction Auto Sale", "Repos" and "Bank Asset Sale" in advertisements. The defendants' ads also include "$0 Down Delivers."
The lawsuit alleges that RGH either knew or should have known that a dealer can't prove those statements are true.
"Whether some dealers are intentionally detouring around the law or ignorant of it doesn't matter in the end - they can still be sued," McKenna said. "The increased sales revenue isn't worth so much when you have to pay attorneys fees and penalties."
Hubbard, doing business as U.S. Marketing Direct in 2006, was sent a notice by the Oregon Department of Justice that alleged that Hubbard, along with RGH Marketing and other individuals, was violating the law with direct mail advertisements for "pre-auction liquidation" sales events.
Those flyers advertised Nationwide Fleet Liquidators events that were conducted by Kirby Car Company and Newberg Dodge Chrysler Jeep that, despite claiming otherwise, were selling vehicles offered at retail prices.