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Post date: February 28 2002

Auto Dealer Cited For Deceptively Selling Rental Cars

Attorney General Spitzer today announced a settlement with a Greene County auto dealer to refund thousands of dollars to customers who were duped into buying former rental vehicles.

Condor Pontiac, Cadillac, Buick and GMC Trucks, Inc. of Catskill settled allegations that it violated consumer protection laws through its false and misleading advertising campaigns, including failing to disclose important information about the prior use of used cars.

"My office will aggressively pursue cases against auto dealers who engage in misleading and deceptive advertising to attract consumers into their showrooms," Spitzer said.

Spitzer's office cited Condor for numerous violations of state laws and advertising guidelines issued by the Attorney General's office. Among other things, Condor was found to have sold used cars to consumers without informing the buyers that the vehicles were actually former rental vehicles.

The State Vehicle and Traffic Law requires dealers to notify buyers of the prior use of vehicles that were: taxis, rental cars, police vehicles or returned to the dealer as a "lemon."

In settling the case, Condor agreed to pay over $13,600 in refunds to six consumers who had unwittingly purchased former rental vehicles. In addition, Condor agreed to provide restitution equal to 15 percent of the sales price of each rental car sold after January 1, 2001 where the buyer was not informed of the vehicle's prior use. For consumers who unknowingly purchased rental cars between January 1, 1999 and December 31, 2000, Condor agreed to pay restitution equal to 10 percent of the sales price.

Spitzer's investigation also revealed that Condor engaged in a deceptive campaign to promote "repo sales," which promised buyers they could take over the remaining payments of the defaulted prior owner. These sales events were not specially stocked with repossessed vehicles, and the monthly payments offered were not based upon the payments owed by previous owners.

Other deceptive advertising practices that Condor engaged in included:

  • Advertising discounts from fabricated prices;
  • Falsely implying that all consumers could get financing regardless of creditworthiness;
  • Falsely implying that sales events were forced liquidations providing special bargains to buyers; and
  • Failing to disclose significant financial information that greatly affected the value of advertised offers in violation of the Truth-In-Lending Law.
Condor was fined $12,000 for its violations of consumer protection laws and agreed in the future to notify customers in writing of each vehicle's prior use. The dealership also agreed to cease its deceptive advertising practices.

Since many consumers are not yet aware that they purchased former rental vehicles and may be eligible for restitution, the settlement provides a "window" period ending June 15, 2002 for individuals to contact the Attorney General's office. It is recommended these consumers call the Poughkeepsie Regional Office at (845) 485-3900 or the consumer help line at (800) 771-7755 for assistance.

This case was handled by Assistant Attorney General Nicholas Garin of the Poughkeepsie Regional Office with the assistance of Consumer Frauds Representative Mark Hoops.