Attorney General Cuomo Announces Settlement With Two Hudson Valley Car Dealers For False Advertising

April 4, 2007 – Attorney General Andrew M. Cuomo today announced a settlement with two Mid-Hudson Valley Chevrolet dealers who used deceptive fliers to deceive consumers. One dealer issued a false safety recall in order to boost business at its repair shop and another used a deceptive flier to lure customers to the dealership.

In February, Poughkeepsie Chevrolet mailed thousands of fliers to Hudson Valley owners of General Motors cars with a headline that read “IMPORTANT – SECOND NOTICE – SAFETY RECALL,” complete with a recall number, warning consumers that their vehicles “may be at risk” and to call their “designated safety recall center” and schedule an appointment to address the recall. In reality, the recall, including the recall number, was fictitious. The phone number listed on the flier was actually Poughkeepsie Chevrolet’s service center, for which the dealer hoped to increase business.

As part of the settlement, Poughkeepsie Chevrolet agreed: not to advertise any recalls unless specifically requested by a government agency or manufacturer, not to misrepresent any aspect of a recall, and not to portray itself as a designated safety recall center. In addition, Poughkeepsie Chevrolet paid $5,000 in civil penalties.

In September 2006, Harriman Chevrolet promoted a four-day sale by sending a flier to thousands of consumers in Orange County and surrounding areas offering deals and credit terms that did not exist. Among the misleading offers was a guaranteed $3,000 for any trade-in vehicle the consumer could “push, pull or tow” to the dealership, as well as financing consisting of $59 down and monthly payments of $129 for terms as short as 24 months. The flier also included a scratch-off prize giveaway for $250, $500, a 32" LCD TV, or a grand prize vacation package that only 2 percent of consumers receiving the flier would win, according to the dealership. However, all consumers won the dubious grand prize: a hotel room for two nights at a cost of $50 plus taxes, computed on the room at its regular price. All other expenses were to be born by the consumer.

In a settlement, Harriman Chevrolet agreed to no longer advertise in this manner, to comply with the Attorney General’s Advertising Guidelines for Auto Dealers and pay $10,000 in civil penalties.

“Consumers were rightfully outraged when they discovered they had been duped by these dealers’ deceptive practices,” said Attorney General Cuomo. “Purchasing an automobile is a major investment that can be a complicated and stressful process, and dealers trying to take advantage of New York’s consumers will not go unnoticed by my office. These two businesses made the right choice by agreeing to reform their practices.”

The cases were handled by Assistant Attorney General Nick Garin with the assistance of Mark Hoops, Senior Consumers Frauds Representative under the supervision of acting Attorney General-in-Charge, Barry Kaufman from the Poughkeepsie Regional office.