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Firm Suing TrueCar Files Second Mass Action Lawsuit

August 04, 2015

MINEOLA, N.Y. — Bellavia Blatt & Crossett filed a second mass action lawsuit against TrueCar on July 30, this time representing 100 dealerships that are currently affiliated with the car-shopping site.

In March, the law firm filed a mass action lawsuit on behalf of 117 — now over 200 — non-affiliated dealerships, alleging that TrueCar’s business practices have injured its former dealer partners and dealers that do not subscribe to the service by “poaching” customers in their market area.

According to the lawsuit filed last week, TrueCar is violating California deceptive practices statutes by claiming to be “transparent” with “no hidden fees” and "no surprises” — when in fact it charges dealers a $299 new-car and $399 used-car transaction fee that gets passed along to the consumer in the price of the vehicle.

“We will be seeking a court order requiring TrueCar to openly disclose in its advertising and on the guaranteed savings certificate that there is a $299/$399 fee participating dealers pay that may affect the selling price of the vehicle,” said Leonard Bellavia, senior partner at Bellavia Blatt & Crossett. “We will also seek a declaration that TrueCar's business model is illegal in most states, as it is not properly licensed.”

Bellavia added that dealers subscribing to TrueCar are damaged because they do not wish to be complicit in violating consumer fraud statutes. The lawsuit alleges that TrueCar is acting as a car dealer and broker without the proper licenses. And if consumers knew about the fees prior to their dealership visit, the dealer would then be protected from joint liability, Bellavia added.

TrueCar has called the allegations “meritless.”

“In the first case, TrueCar recently filed a motion to dismiss — essentially arguing that all of its promises are simply ‘puffery,’” Bellavia said. “It went so far as to quote a case that held it could lie through its teeth with impunity, as consumers would not take any of the promises seriously.”

The lawsuit is similar to one filed in May by the California New Car Dealer Association, which alleges that TrueCar is not in compliance with certain sections of the California Vehicle Code pertaining to dealer licensing, brokering, advertising and disclosure.

Comments

  1. 1. Todd Baker [ August 04, 2015 @ 01:53PM ]

    TrueCar is led by the same guy, Scott Painter, that has been poaching of the new car business for years. His previous business ventures all failed, losing millions, and TrueCar is another example of someone trying to make money without having to worry about customer service, and customer satisfaction. If customers would come in directly to the dealer, in most cases they would get a better deal than with TrueCar, because there is no fee to pay. People like Mr. Painter should buy a dealership if they wish to be in the car business, and quit trying to prostitute the business without having to actually offer full service. More and more dealers seem to be running from TrueCar, just like they did in the past with Mr. Painters other ventures.

  2. 2. Todd Baker [ August 04, 2015 @ 02:30PM ]

    Oh, and by the way, according to public information released last week, TrueCar has lost millions so far, without having ever made a profit. Maybe the business model doesn't work so good.

  3. 3. David Ruggles [ August 04, 2015 @ 05:20PM ]

    Mr. Baker - you are SO VERY correct on all points.

  4. 4. Devon Shell [ March 01, 2016 @ 03:30PM ]

    I work as a Sales and leasing consultant in California, and from what I learned with working with TrueCar that it helps destroy profits when working a deal. Thankfully we have started moving away from working with them

 

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