Settlement reached in McKenna's inquiry of car dealer
SEATTLE (Legal Newsline) - Washington Attorney General Rob McKenna announced on Thursday that the owners of a Whatcom County car dealership will pay penalties and attorneys fees to settle allegations of deceptive sales and advertising practices.
McKenna's Consumer Protection Division filed a complaint and consent decree on Wednesday against RHLI Inc., the owner of Dewey Griffin Buick-GMC-Subaru. In that complaint, McKenna alleged that RHLI "power booked" loans by misrepresenting the value of vehicles to banks. "Power booking" is when a dealer lists phantom options such as sun roofs, luggage racks and sport packages in order to qualify consumers for loans.
"A dealer is prohibited by law from fudging or making misrepresentations in loan documents," said Mary Lobdell, the assistant attorney general. "As we unfortunately witnessed in the housing meltdown, misleading or inaccurate documents can have terrible consequences for borrowers and lenders alike."
The AG's office made a series of additional allegations that are resolved by the settlement, including that RHLI created a false sense of urgency in its advertisements, such as an "emergency sell-off" in violation of state law; failed to disclose restrictions or conditions related to sales offers by sending out mailers advertising vacation packages with each test drive without also mentioning that the prize required the payment of fees and taxes along with other restrictions; and failed to comply with the Truth in Lending Act.
The company also allegedly misled consumers with deceptive savings by advertising "40% off orig. MSRP" for used vehicles when the MSRP is not the industry standard for pricing used vehicles and failing to conspicuously and clearly disclose the number of vehicles available at the advertised price in close proximity to the offered price.
The company also allegedly violated the Promotional Advertising of Prizes Act by misrepresenting prizes through a "Match and Win" sales event that offered, a $300 gas card that was actually a voucher requiring a $5.00 redemption fee along with the monthly collection of a $100 of gas receipts to FreeBeeGas.com in return for a $25 gas card. Unknown to Dewey Griffin, FreeBeeGas.com was a fictitious name used by Tidewater Marketing, which had its doors closed by the Florida Attorney General for deceptive practices
As a result of the settlement, RHLI Inc. has agreed to penalties of $100,000 with $90,000 suspended, $40,000 in attorneys fees and $1,345.15 in costs, for a total judgment of $51,345.15. The owners did not admit to any wrongdoing as part of the settlement.