Auto dealer settles with New Jersey

Keith Loria Dec. 1, 2010, 3:00pm


NEWARK, N.J. (Legal Newsline) - New Jersey Attorney General Paula Dow announced on Tuesday that she has reached a $140,000 settlement with an Elizabeth, N.J.-based used car dealer that allegedly engaged in questionable business practices.

The State Division of Consumer Affairs joined Dow in announcing the consent judgment, which was based on a lawsuit the two offices filed last year against Global Auto Inc.

Global Auto Inc., which has also done business as Auto Collection Group, has allegedly spent its 11 years in business engaging in unconscionable commercial practices.

The lawsuit alleged that the company used "bait and switch" advertising tactics by misrepresenting used vehicle prices to attract consumers. It also allegedly asked consumers to sign blank documents to effect the sales transaction.

The company also allegedly didn't pay off the loan balances on traded-in vehicles as promised, misrepresented information to a lending institution to obtain better loan financing for one consumer, and failed to tell customers about prior damage to vehicles for sale. It is also alleged to have improperly co-mingled sales documents with a dealership outside the state.

"This settlement puts money back into the hands of consumers who are owed restitution by this dealership," Dow said. "Just as importantly, Global Auto will follow good business practices going forward or we will be back to take further action."

Under the terms of the settlement, Global Auto Inc., is required to pay $16,537 restitution to seven consumers, $86,462 in civil penalties to the state and $37,000 for costs associated with the litigation.

The civil penalty will have $50,000 suspended for a year unless the company fails to pay the seven consumers their money in the next 75 days or if it fails to abide by all terms of the settlement for the next year. If compliant, the penalty will be waived.

The agreement also calls for the company to adopt and strictly follow specific business practices consistent with the state's consumer protection laws and regulations.

The company, under terms of the settlement, may not issue temporary registrations for used motor vehicles unless it has the title to the vehicle in its possession, may only issue temporary registrations for used motor vehicles pursuant to a sale or lease; must honor all advertised sales prices and terms of any negotiated deal, and must provide all proper documentation to buyers.

In addition, the company may not misrepresent a consumer's financial or other information to a lending institution, must not charge consumers for certain merchandise and not provide it, must pay all balances due to lien holders within 30 days if that was part of the sales agreement, and must disclose all vital information about the vehicle's history.

Global Auto must also not sell any motor vehicle unless the total selling price is plainly marked by a stamp, tag, label or sign either affixed to the motor vehicle or located at the point where the motor vehicle is offered for sale.

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