Attorney General Cuomo Fines Wny's Basil Toyota And Basil Resale Sheridan For Deceptive Ads Regarding Federal "cash For Clunkers" Program

BUFFALO, N.Y. (August 27, 2009) - Attorney General Andrew M. Cuomo today announced that his office has obtained a court order and settlement agreement amounting to a combined $70,000 in fines and costs against two Buffalo-area car dealers for deceptive and misleading advertising regarding the federal Car Allowance Rebate System (“CARS” or “Cash for Clunkers”).

Cuomo’s office took the action after Basil Resale Sheridan and Basil Toyota failed to abide by cease-and-desist letters recently sent to the two dealerships and nearly 40 others across the state.

“My office sent out letters to dealerships in order to give them a chance to correct their misleading advertisements,” said Attorney General Cuomo. “Unfortunately, these two companies failed to abide by the law and continued to try to lure consumers with misleading information about the federal program. All car dealerships must comply with the advertising guidelines in order to ensure a marketplace that is fair for both consumers and competitors.”

In an advertisement that ran on July 30, used car dealer Basil Resale Sheridan, located on Sheridan Drive in Williamsville, implied that it was participating in the “Cash for Clunkers” program, even though it was only applicable to new car dealerships. Since the dealership had a prior agreement with the Attorney General’s Office regarding deceptive advertisements, Basil Resale Sheridan was ordered by Erie County Court Judge David Manz to pay a $50,000 fine to the state.

Basil Toyota, located on South Transit Road in Lockport, failed to comply with the Attorney General’s letter and actually re-ran the same advertisement that spurred the inquiry. Attorney General Cuomo’s Office informed Basil Toyota that the ad in question buried the critical qualifications and specifics of the CARS program. Through an agreement with the Attorney General’s Office, Basil Toyota must pay $20,000 in costs and fines to the state.

Both dealerships are also required to maintain copies of all advertising for inspection by the Attorney General’s Office for two years.

Shortly after the CARS federal program began, the Attorney General’s Office sent letters to nearly 40 dealerships across the state after it became aware that the businesses were employing deceptive or misleading practices in their advertisements touting the CARS program. Cuomo’s office found that the dealerships omitted significant requirements that had to be met in order for a consumer to be eligible to get the rebate. The ads misled consumers into believing that their trade-in vehicle qualifies for the program when it does not or that they were eligible for a several-thousand-dollar rebate, when they were not.

The “Cash for Clunkers” program provided funds with which auto dealerships could credit consumers $3,500 or $4,500 for trade-ins that were worth considerably less. It sought to boost the economy and promote a cleaner environment by encouraging consumers to trade in their current vehicle for a newer, more fuel efficient one.

Attorney General Cuomo urges any consumer who believes they are a victim of fraudulent or deceptive business practices to contact his office at 800-771-7755. Auto advertising guidelines for dealers are available online here.

The Basil matters were handled by the Attorney General’s Buffalo Regional Office with the assistance of Senior Consumer Frauds Representative Karen Davis under the supervision of Deputy Attorney General for Regional Affairs J. David Sampson.

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