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Post date: November 7 2002

Syracuse Car Dealer Cited For Deceptive Sales Tactics

Attorney General Spitzer said today that a court order has been obtained against a Central New York auto dealer accused of a series of misleading sales tactics.

Under the order, the Sam Dell Group. Inc. - with dealerships in Syracuse, North Syracuse and Liverpool - has agreed to pay refunds to customers, pay more than $50,000 in penalties and reform its business operations.

"Auto dealerships have a responsibility to be truthful in advertising and deal with customers in a fair and forthright manner," Spitzer said. "That is the law, and my office is committed to enforcing it."

Spitzer's office began an investigation of the Dell Group after receiving consumer complaints regarding sales events that took place in the spring of 2002.

The investigation found that the dealership:

  • Routinely advertised low sales prices on popular car models and then failed to stock or deliver the vehicles at the advertised price;

  • Failed to disclose hidden costs, such as VIN etching options, and extended service contracts in sales contracts;

  • Added costs that negated the value of vehicle "trade-ins";

  • Boldly advertised an attractive sale price that did not represent the actual purchase price of the advertised vehicle; and

  • Lured consumers to their showrooms by falsely implying that anyone could receive credit.

In addition, the dealership was found to have targeted an auto parts company's employees with false and misleading sales pitches. Employees of Syracuse's New Venture Gear (NVG) - a subsidiary of the Chrysler Corporation - were targeted with promotions implying that the employees could receive better discounts at the Sam Dell Chrysler-Plymouth dealership than at its competitors. In reality, some NVG employees paid more than necessary for vehicles at Dell because the pending sale price was, in fact, lower than the employee discount.

The court order, signed by State Supreme Court Justice John V. Centra, requires the Sam Dell Group to implement significant reforms in its advertising and sales practices. The reforms are designed to bring the company into compliance with state and federal advertising laws.

The dealership will pay restitution totaling more than $13,000 to 16 consumers who were either overcharged for vehicles they purchased, were not informed as to the actual value they were receiving for their trade-in vehicles, or who were charged for services they did not request. The company will also pay $53,000 to the state in civil penalties and costs.

The court's order provides a mechanism for evaluating complaints in order to determine whether additional restitution should be awarded. Individuals who purchased vehicles from any of the Sam Dell dealerships after January 2002, and who have a complaint concerning deceptive sales tactics, are encouraged to contact the Attorney General's Office at 1-800-771-7755 before January 21, 2003.

This case was handled by Assistant Attorneys General Judith Malkin and Winthrop Thurlow of the Syracuse Regional Office.