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Oregon AG Settles With Two Dealerships Over False Advertising

November 14, 2006

Salem, Ore.—Oregon Attorney General Hardy Myers announced Monday the filing of settlement agreements with two Eugene new-car dealerships and a Portland used-car company for misleading advertising in the areas of credit, free gas offers and unclear sponsorship of sales, according to KTVZ news sources.

Named in Assurances of Voluntary Compliance filed in two Circuit Courts are CarMart Inc., doing business as Car Mart of Portland and JKC Automotive Inc., doing business as Kiefer Kia, Kiefer Mazda, Kiefer Mazda-Kia, Kiefer’s Eugene Mazda, Kiefer’s Kia, Kiefer’s Mazda and U.S. Auto Wholesale, all owned by John P. Kiefer, president of Eugene. The AVCs admit no law violation.

Oregon Department of Justice staff found a direct mail flyer from Car Mart advertising with a “false credit offer.” Consumers who had filed for bankruptcy were promised “great opportunities” through a pre-qualified certificate, which was supposedly good for up to $24,995. Justice staff later discovered that consumers were not pre-qualified for any loan.

Justice staff received several consumer complaints against Car Mart. These alleged that Car Mart refused to unwind the deal, return deposits and the consumers trade-in vehicles when the company was unable to obtain financing as negotiated. The dealership must do all three under Oregon’s “bushing” law, or be in violation of the Unlawful Trade Practices Act.

Kiefer’s Eugene Kia dealership advertised “free gas” on billboards and in newspaper ads, and individual cars were listed as coming with “gas for a year.” However, consumers were told in barely readable type to “make your best deal on a package price, Gas Offer is $500 Gas Card.”

Under the CarMart Inc. agreement, the company must comply with credit repair statutes, the state “bushing” law and agree to permanently close CarMart. Kiefer also agreed not to open another used-car store in the Portland metro area for at least one year and to pay $1,000 to the DOJ Consumer Protection and Education Fund.

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