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Post date: November 25 2002

Third Auto Dealer Cited For Deceptive Sales Of Former Rental Cars

Attorney General Spitzer today announced a settlement with a Warren County auto dealer to provide refunds to consumers who were not given proper notice that they were buying former rental cars.

Garvey Volkswagen Hyundai Kia Mitsubishi of Queensbury settled allegations of deceptive business practices and false advertising.

"Consumers must be provided adequate information about vehicles for sale in order to make wise purchasing decisions," Spitzer said. "State law requires the disclosure of a rental car's prior use so that consumers can take that into consideration when negotiating with an auto dealer."

In settling the case, Garvey agreed to make restitution of between $1,000 to $1,500 apiece to at least 34 consumers in Columbia, Essex, Franklin, Saratoga, Warren and Washington counties. Garvey has also agreed to pay restitution to additional individuals who within five months file bona fide complaints of having bought former rental cars without proper disclosure.

State law requires that auto dealers disclose in writing if cars were previously used as police cars, taxis, rental vehicles or autos that were returned to the dealer as a "lemon."

In the course of its investigation, Spitzer's office also found that Garvey's advertisements prominently displayed low monthly payments. However, the ads' fine print contradicted this claim with a disclosure that a significant balloon payment, generally in the thousands of dollars, would be due as the final monthly payment. The Attorney General's Office found that these ads violated the Truth In Lending law which requires the disclosure of credit terms when advertisements state the amount of any down payment, interest rate or monthly payment.

The settlement therefore also requires Garvey to reform its advertising practices and to pay $5,000 to cover the costs of the investigation.

Recently, Spitzer's office investigated two other auto dealers for similar deceptive sales of former rental cars. Condor Pontiac, Cadillac, Buick and GMC Trucks, Inc. of Catskill and Orange County Cars, Inc., d/b/a Middletown Mazda Volkswagen, were cited earlier this year for failing to provide proper notice to consumers purchasing former rental cars. In the case of Condor, the Office filed a lawsuit after receiving nearly 90 complaints from consumers seeking restitution amounting to over $175,000. In its case, Middletown Mazda agreed to pay over $21,000 to nine consumers.

Individuals interested in determining whether they are eligible for restitution from Garvey Volkswagen are encouraged to contact the Attorney General's consumer help line at (800) 771-7755.

This case was handled by Assistant Attorney General Robert Vawter of the Consumer Frauds and Protection Bureau.