McKenna settles with car dealers

Bryan Cohen Aug. 19, 2011, 1:54am


OLYMPIA, Wash. (Legal Newsline) - Washington Attorney General Rob McKenna announced eight settlements on Thursday with car dealers over ads that allegedly violate consumer protection laws.

"A car may be the most expensive purchase a Washington resident makes," Mary Lobdell, the assistant attorney general and a member of McKenna's Consumer Protection Division, said. "Unfortunately, many car ads are confusing or misleading. Buyers and businesses benefit when dealerships put straightforward advertising in the front seat."

Settlements were reached with D and S Auto World Inc., doing business as Shafer Motor Company and Auto Plaza USA II; Bulldog Motors LLC, doing business as All Star Automotive Group; Grover Dykes Auto Group Inc., doing business as Legacy Ford of Tri-Cities; Legacy Ford of Walla Walla and Legacy Ford of Pasco; L III Inc., doing business as Consumer Auto Liquidators; Haselwood Buick-Pontiac Company, doing business as Haselwood Buick Pontiac GMS Truck; West Hills Company, doing business as West Hills Honda; Heartland Motor Company, doing business as Heartland Toyota Scion; Bud Clary of Yakima Inc., doing business as Toyota of Yakima and Bud Clary's Discount Outlet; and Hahn Motor Company.

The settlements addressed multiple alleged advertising violations, including failing to properly disclose the vehicle service documentary fee, creating a false sense of urgency, misrepresenting the number of vehicles offered for sale, advertising free merchandise and prizes without adequately disclosing that consumers would need to pay shipping and handling fees, failing to provide disclosures required by the federal Truth in Lending Act, making statements that the dealer could not substantiate through its business records, failing to identify vehicles by VIN or plate number, using terms not familiar to the general public, failing to comply with the state's Prizes and Promotions Act, and offering a rebate that is not associated with a manufacturer or failing to disclose material terms in conjunction with a rebate offer.

D and S Auto and Hahn Motor Company separately agreed to advertise the documentary service fee as provided by law, to pay $5,000 to reimburse the state for attorneys fees and legal costs, and to comply with other restrictions on theta advertising practices.

Bulldog Motors and Parkway separately agreed to comply with restrictions on theta advertising practices and pay $5,000 to reimburse the state for fees and costs, while Grover Dykes and L III separately agreed to advertise the documentary service fee, to comply with promotional prize laws, to substantiate advertisement claims and to pay $10,000 to reimburse the state for fees and costs. LIII must also refund documentary services fees paid by consumers where the fee was materially misrepresented or was not disclosed in advertising publishing since January 1.

Haselwood, West Hills and Heartland Motor agreed to comply with restrictions on advertising practices and to pay $10,000 to reimburse the state for fees and costs. Bud Clary agreed to advertise the documentary service fee, to comply with disclosure requirement, to disclose the number of vehicles available at an advertised price and to pay $5,000 to reimburse the state for fees and costs. It must also refund documentary service fees paid by consumers purchasing certain vehicles advertised in the Yakima Herald-Republic in November 2009 and February 2010.

The allegations resolved in these agreements don't require the businesses to admit any wrongdoing while imposing restrictions on their marketing practices. The dealers denied any wrongdoing and cooperated with McKenna's office throughout the course of the investigation.

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