Goddard settles with auto dealers

Nick Rees May 6, 2010, 3:54pm


PHOENIX (Legal Newsline) - Arizona Attorney General Terry Goddard announced two settlements totaling $195,000 on Thursday from auto dealers.

The settlements were reached with Avondale Automotive, Inc., of Avondale, which agreed to pay the state $100,000, and three Steve Coury dealerships - Steve Coury Ford, Lincoln-Mercury, Inc., of Cottonwood; Steve Coury Automotive Family, Inc., of Camp Verde; and Steve Coury Buick Pontiac & GMC Truck, Inc., of Cottonwood - which agreed to collectively pay the state $95,000.

"Arizona law requires that car dealers advertise honestly," Goddard said.

"In these tough economic times, it is especially important that dealers not promise sweepstakes prizes that they don't deliver or 'bait and switch' customers by advertising guaranteed credit approval, steep discounts, low monthly payments and low interest rates that no one actually receives."

The state alleged that Avondale Automotive, from Nov. 2005-2009, engaged in various unlawful and deceptive practices in relation to the sale and advertisement of new vehicles in violation of the Arizona Consumer Fraud Act.

According to Goddard, the major deceptive practices allegedly employed were the failure to sell specific vehicles at advertised prices and a variety of deceptive advertisements.

Under terms of the consent judgment, Avondale Automotive is prevented from deceptive practices and is required to provide summaries of the injunctive terms to third-party marketers and to provide training to sales staff and managers.

The Steve Coury Automotive settlement follows allegations stemming from consumer complaints from Oct. 2006-Feb. 2008 that allege the dealerships sent out advertising materials that were deceptive or misleading. The complaints led to a consumer fraud investigation.

Among the alleged violations were falsely advertised large discounts off of the Manufacturer's Suggested Retail Price on used vehicles when the MSRP was based on new vehicle prices and the use of contradictory and confusing disclaimers in footnotes at the bottom or advertisements or on separate pages.

Steve Coury Automotive did not admit to any wrongdoing in agreeing to the settlement, which requires the company to engage in truthful, non-misleading advertising and to identify the number of vehicles to which an advertised special offer applies.

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