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Four N.Y. Car Dealers Penalized for False Advertising

August 04, 2008

ALBANY, N.Y. — New York Attorney General Andrew M. Cuomo has announced settlements with four Hudson Valley car dealers that misled consumers by promising certain vehicle offers but hid specific qualifiers in the fine print or disclaimers.

The AG's office said Middletown Pontiac, Buick, GMC and Saturn of Newburgh (owner of Saturn of Poughkeepsie and West Nyack) mailed fliers to thousands of Hudson Valley residents offering a minimum value for any vehicle the consumer traded in — regardless of its condition. The dealerships attempted to substantially modify these offers in the footnotes, but failed to address the primary misleading offer in the body of the ad.

The Saturn dealerships were also cited for announcing in their flyer that the recipient was pre-approved for $25,000 credit - another offer that was significantly modified in a footnote with the restriction that the consumer must have a credit score of 760 or above, Cuomo's office said.

Newburgh Nissan advertised new-vehicle prices as "below invoice" on its flier. The AG pointed out that, although invoice is generally understood as the dealer's total cost, a footnote at the bottom of the flier limits the offer by explaining the invoice does not reflect actual dealer invoice, meaning "invoice price" is not the total cost. This flier is deceptive as the footnote altered the facts of the dealer's offer, Cuomo's office said.

Additionally, Brag Suzuki in Middletown was cited for two misleading radio commercials, according to the AG. One commercial offered consumers 100 percent of the original MSRP on any vehicle traded in — regardless of its condition. However, in a disclaimer at the end of the commercial spoken so fast that it is virtually indecipherable, Brag Suzuki considerably altered the offer by stating that there would be a deduction from the MSRP of $0.35 for each mile on the vehicle and, for vehicles more than one year old, an unspecified reconditioning charge.

In the second radio spot, Brag Suzuki offered to beat any competitor's price or pay the consumer $5,000. This offer was also changed at the end of the commercial by requiring the consumer to prove the lower price of a competitor by bringing in a signed purchase order from the competing dealer — a requirement the AG noted was unreasonable.

Each of the dealers has agreed to discontinue the practices cited by the Attorney General and pay fines for the violations. Middletown Pontiac, Buick, GMC is paying $10,000, Saturn of Newburgh is paying $10,000, Newburgh Nissan is paying $5,000 and Brag Suzuki is paying $7,500.

The AG's office points out that it publishes guidelines, which are available online, that clearly spell out the limits of auto dealer advertisements. The office also conducts seminars with dealers so that they are kept up to date with the guidelines.

The office provided some of the following examples of what is not permitted:

• Use of one or more footnotes or asterisks which, alone or in combination, materially modify the principal message of the ad;

• Use of any print in type size so small as to be not easily readable;

• Use of any unexplained abbreviation or jargon which is confusing, misleading, or not readily understood by the general public; and

• Use of any advertising offering a range of prices for trade-ins, unless the advertisement discloses the criteria for the range.

Copyright 2008 CounselorLibrary.com LLC. All rights reserved. This article appeared in Spot Delivery. Reprinted with express permission from CounselorLibrary.com LLC.

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