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Compliance

N.J. Dealerships to Pay $135,000 Settlement

June 18, 2015

NEWARK, N.J. — Bergen Auto Enterprises LLC, which does business as Wayne Mazda and Wayne Auto Mall Hyundai, has agreed to pay $135,000 to settle claims that the dealerships engaged in unconscionable commercial practices and deceptive advertising practices in the advertisement and sale of new and used motor vehicles.

The final consent judgment concluded a lawsuit filed by the Office of the Attorney General and Division of Consumer Affairs in August 2014, which alleged that Bergen Auto Enterprises had violated the Consumer Fraud Act and Motor Vehicle Advertising Regulations, among other things, by engaging in “bait and switch” tactics by featuring motor vehicles in advertisements that were not actually available for purchase or lease. The dealerships also allegedly failed to disclose to customers that some used vehicles had previously been used as rental vehicles and/or had sustained significant prior damage.

“Purchasing a new or used motor vehicle can be a very intimidating process for consumers,” said acting Attorney General John J. Hoffman. “This settlement ensures that Bergen Auto Enterprises will make all appropriate disclosures in advertisements and otherwise.”

“The Division of Consumer Affairs will take action whenever allegations of deceptive practices by auto dealerships are made,” said Steve Lee, acting director of the State Division of Consumer Affairs. “New Jersey’s consumers deserve honesty and full disclosure when dealing with these dealerships.”

As part of the settlement, Bergen Auto Enterprises must pay $135,000, which is comprised of a civil penalty of $109,595.45 and $25,404.54 for reimbursement of the State’s attorneys’ fees and costs. The settlement also includes a $50,000 suspended civil penalty, which will be vacated after one year if Bergen Auto Enterprises does not violate the terms of the final consent judgment.

Bergen Auto Enterprises is also required to undertake a search using a vehicle history service, to discern the prior use of the used cars advertised and/or offered for sale and to determine whether the used vehicle has been in an accident or otherwise sustained damage. Then, such information must be disclosed to consumers prior to the purchase of the car.

The consent judgment also requires that in all advertisements of used cars, the dealerships must clearly and conspicuously disclose the prior use of the vehicle, unless previously and exclusively owned or leased by individuals for their personal use; and clearly and conspicuously disclose whether a used car had been previously damaged and that substantial repair or body work has been performed on it.

Ads must also include the statement that “price(s) include(s) all costs to be paid by consumer, except for licensing costs, registration fees, and taxes,” as well as clearly and conspicuously disclose — next to a purported unconditional offer — all disclaimers, qualifiers or limitations that in fact limit, condition, or negate such offer. The dealerships must also clearly and conspicuously disclose the applicable time period of any special offer, unless such offer is a manufacturer’s program.

Bergen Auto Enterprises is additionally prohibited from advertising a motor vehicle for sale or lease without possessing title to the motor vehicle.

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