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Post date: May 19 2004

Civil Penalties Levied Against North Country Auto Dealer

Attorney General Spitzer today announced that his office has obtained a settlement with the operators of five North Country auto dealerships penalizing them for repeated incidents of false and misleading advertising.

In settling the investigation, FX Caprara agreed to pay $57,500 in penalties and costs to the state and to comply with the Attorney General's guidelines for auto advertising and federal and state false advertising laws.

"False, misleading and deceptive advertising creates an unfair competitive advantage in the auto industry," Spitzer said. "My office will continue its broad-based effort to clean up auto dealer ads across the state to promote fair competition and ensure that consumers have access to accurate information."

Spitzer's investigation revealed that Caprara repeatedly and persistently violated federal and state laws that prohibit false and deceptive advertising. Specifically, Caprara's ads:

  • Falsely implied that sales events were forced liquidations providing special bargains to buyers;
  • Misled consumers with price comparisons using "wholesale prices" that did not reflect the dealer's ultimate vehicle cost;
  • Promoted the lowest price for vehicles for which a footnote's small print materially modified or contradicted the promoted price. These ads also failed to disclose significant information that greatly affected the value of the advertised offers in violation of federal regulations;
  • Promoted the lowest prices in ads, without disclosing (or doing so in extremely fine print) that the advertised price excluded a range of additional fees and charges or applied rebates of limited availability;
  • Offered low-percentage rate financing in television commercials that failed to disclose the conditions or limitations of the offer;
  • Offered low financing rates and/or low monthly payments, that were restricted by the fine print using phrases that the public might not understand, such as small print that reads "qualified buyers with approved Tier 1 credit";
  • Claimed to be the "#1 volume dealer in New York State" without evidence to prove such a claim. In addition, these ads falsely implied to consumers that the auto dealer could sell cars at lower prices than its competitors due to its sales volume;
  • Used price comparisons with other dealerships without clearly and conspicuously disclosing Caprara's price matching policy;
  • Falsely implied that all customers would get $2,000 off the purchase price for a vehicle regardless of the condition of their trade-in; and
  • Falsely implied that all consumers could get financing regardless of creditworthiness.

Spitzer's office also raised concerns about some of Caprara's sales practices. According to findings contained in legal documents filed in the matter, salespersons at the auto dealership misrepresented to consumers that extended warranties were required in order to obtain financing, which would violate the state Insurance Law. In addition, Caprara failed to notify consumers purchasing cars from Canada that their warranties might be invalid or that standard features or safety equipment could differ from vehicles originally sold in the U.S.

This case is the latest in an on-going effort by Spitzer's office to monitor auto advertising and sales practices throughout the state. Since 1999, Spitzer's office has commenced enforcement actions against nearly 190 auto dealers across the state, the vast majority of which involved violations of federal and state laws that regulate auto advertising.

The settlement names five dealerships under the ownership and control of Francis X. Caprara, Charles Caprara and William Francis Caprara, including: FXC Enterprises, Inc., d/b/a FX Caprara Auto Gallery, FX Caprara Auto Sales, Kia; FX Caprara Truck & Van Center of Carthage, inc.; FCX Chrysler Plymouth, Inc., d/b/a/ FX Caprara Volkswagon, Chrysler, Plymouth, Jeep; FX Caprara Dodge, Chrysler, Jeep Eagle, Inc.; and FX Caprara Chevrolet, Olds, Buick, Inc.

Individuals with complaints about auto dealerships are directed to contact Spitzer's consumer help line at (800) 771-7755.

For consumer tips about car buying and recognizing deceptive hype in auto ads, consumers are encouraged to visit the Attorney General's web site at https://ag.ny.gov/consumer-frauds/tips.

This case was handled by John Sullivan, Assistant Attorney General In Charge of the Watertown Regional Office.