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Texas Dealership Settles Suit Alleging Deceptive Trade Practices

January 11, 2005

The Texas state attorney general sued Yoder Ford (also known as Hacienda Ford) of Edinburg, Texas, for allegedly tricking customers into paying for alarm systems. The alarm systems added about $800 to the advertised price of the vehicle. The dealership agreed to refund about 130 customers for overpayment.

"Although a Yoder Ford representative wrongfully engaged in this scheme, the company uncovered the conduct and cooperated with my office in resolving this matter with customers," said Texas Attorney General Greg Abbott.

A statement from the attorney general's office said the dealership advertised sales prices for certain vehicles in newspaper ads but never intended to sell the vehicles at the advertised prices. At the close of each deal, the dealership employee would add the $800 for the alarm to the advertised price, often without the buyer's knowledge or consent, or without telling the buyer the purchase was optional. Advertising prices with the intent not to sell at those prices is considered a "bait" scheme that violates the Texas Deceptive Trade Practices Act.

The newspaper ads noted that a charge for the alarm would be added to the advertised price. But only tax, title and license fees can be legally excluded from the price, according to the attorney general's office.

In June 2002, Abbott also sued two other car dealerships for employing the same type of practice. These cases are pending in court.

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