Attorney General Peter F. Neronha announced today that his office has reached a settlement agreement with the owners of six car dealerships in East Greenwich, Middletown, Narragansett, and Westerly for alleged deceptive sales practices. The dealerships will pay over $1 million in refunds to customers and payments to the state.
In the Assurances of Voluntary Compliance filed in Rhode Island Superior Court on July 29, 2024, the Attorney General alleges that Flood Ford of East Greenwich, Flood Mazda of East Greenwich, Flood Ford of Narragansett, Valenti Subaru of Westerly, Valenti Toyota of Westerly, and Saccucci Honda of Middletown automatically charged or attempted to charge purchaser fees for an add-on warranty not included in the vehicles’ advertised price. These fees allegedly violated the Deceptive Trade Practices Act (DTPA) and Rhode Island DMV’s Rules and Regulations by requiring dealers to honor advertised prices and prohibiting them from charging customers fees for products without their express consent.
This settlement follows a similar agreement in July 2023 with three other Rhode Island motor vehicle dealerships regarding deceptive advertising practices. That agreement resulted in more than $450,000 in refunds to consumers who were charged for a paint protectant and associated warranty.
“Today’s settlement is another strong step forward in our Office’s fight to promote a fair, transparent, and competitive marketplace for all consumers,” said Attorney General Neronha. “Rhode Islanders should be able to trust that the price they see at the beginning of a transaction is the price they end up paying at the end.”
Under DTPA and DMV regulations, dealers can only advertise prices they intend to sell vehicles for while allowing narrow exceptions such as sales tax and negotiable title fees. The Office found that each dealer charged or attempted to charge between $169 and $199 for a theft deterrent warranty not included in advertised prices. Additionally, some dealers allegedly suggested their asking price was the manufacturer’s suggested retail price (MSRP), which was actually higher than MSRP.
The combined settlements will result in over $1 million paid out by these dealers including $874,958 in refunds to thousands of affected consumers. Each consumer who paid this fee since January 1, 2021 will receive between $53 and $83 while retaining the benefit of the warranty. Refund checks are expected approximately 60 days after court approval.
Each Assurance requires dealers to refrain from charging customers without their express consent, misrepresenting fees or pricing information, and comply with DMV rules regarding fees and advertising.
The investigation into dealership sales practices began following vehicle shortages during the pandemic affecting auto markets.
This initiative is part of Attorney General Neronha’s broader effort against unfair practices within the auto sales industry. His office has published a “Buyers Guide” outlining expected fees when purchasing vehicles in Rhode Island while highlighting efforts against illegal fees within this sector.
The Attorney General's actions include issuing notices about illegal price advertising statewide; co-authoring an amicus brief supporting Federal Trade Commission rules on price transparency; reaching agreements with Newport-based dealers over deceptive pricing tactics; actively investigating several other dealerships; filing lawsuits against Bristol-based dealers selling uninspected vehicles violating DTPA regulations among others measures aimed at protecting consumers under recently restored authority granted through legislation passed alongside General Assembly support back In 2021 restoring powers previously held ensuring continued protection from various fraudulent schemes across different sectors including solar panels contractors unsafe vehicle sales amongst others
Assistant Attorney General Stephen Provazza Chief Consumer Economic Justice Unit Investigator Tayla Martins handled matter behalf AG Office
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