Western N.Y. Auto Dealerships Pay Fines For Deceptive Promotions

Attorney General Spitzer today announced a series of settlements involving fake "scratch-off" prize promotions and other false advertising for automobile sales.

Four Western New York auto dealerships and a Louisiana-based firm that specializes in auto ad promotions settled investigations by paying in total $67,000 in civil penalties.

"Auto dealerships cannot use deceptive advertisements and worthless prize promotions to attract consumers to their showrooms," Spitzer said.

Spitzer's investigation centered around brochures developed and sent by Sales360, LLC on behalf of DeLacy Ford, Inc. of Elma and Upstate Chevrolet Oldsmobile & Aurora in Attica, which made several deceptive and fraudulent claims. A separate investigation into brochures sent by Jim Ball Pontiac-Buick-GMC, Inc. and Southtown Suzuki, both in Orchard Park, found similar problems.

It is estimated that as many as 300,000 brochures were sent to Western New York households.

Specifically, the brochures:

  • Greatly exaggerated the number of vehicles that were available at the promoted, discounted price;
  • Used footnotes that contradicted or unreasonably limited offers for trade-ins and discount sales prices; and
  • Used "scratch-off" prize promotions - in which every recipient was the "grand prize" winner of thousands of dollars - that required consumers to go to the showroom to claim their prize. There it was discovered that the prize was virtually worthless because it was provided in the form of gift certificates to a web site that charged exorbitant shipping and handling fees for ordered merchandise.

Other practices cited in the settlement agreements included; references to "reprocessed" vehicles in an obvious attempt to confuse consumers looking for "repossessed" vehicles; promises of Wal-Mart gift certificates to consumers that were, in fact, only available to the first 35 customers each day; and false representations that the auto dealership had been "ordered" to sell 200 vehicles.

For more information about avoiding the pitfalls of auto advertising and tips on new and used auto buying, consumers are encouraged to visit the Attorney General’s consumer web page at http://www.ag.ny.gov/consumer-frauds/tips. To file a complaint against an auto dealership, individuals can call the consumer help line at (800) 771-7755.

This case is the latest in an ongoing effort by Spitzer's office to monitor auto advertising and sales practices throughout the state. Since 1999, Spitzer's office has commenced approximately 200 enforcement actions against auto dealers and their advertising associations across the state.

These matters were handled by Assistant Attorney General James Morrissey of the Buffalo Regional Office.

 

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