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Miscommunication Pitts Georgia Dealer Against Consumer-Protection Agency

July 27, 2007

Atlanta — Bill Heard Chevrolet doesn’t disagree with a state consumer agency that a flier it sent out last fall to about 10,000 Georgia car owners was inappropriate. Rather, the Columbus, Ga.-based dealer disputes charges that it willfully violated consumer protection laws, and said the flier in question was a result of a miscommunication between the 88-year-old dealer’s advertising agency, The Caliber Group, and its publishing house.

Called the first of its kind in 32 years by one local newspaper, a lawsuit filed by the Governor’s Office of Consumer Affairs (OCA) on July 6 alleges that Bill Heard’s mailing last October was intended to deceive car owners into believing their vehicles were unsafe. The suit charges the 15-outlet dealer with trying to sell new cars or service plans on old autos.

“The ironic thing was that this ad didn’t do anything for them,” says Matthew Maguire, an attorney with the Atlanta-based Balch & Bingham LLP who is representing the dealership. The ad offered a free 28-point safety inspection on each vehicle, but did not generate much business, says Maguire.

Under GM, Chrysler, Buick, GMC, Cadillac and Pontiac logos, the flyer announces in large, bold letters: “Urgent Potential Recall Notice.” The inside of the flier then tells recipients that their vehicle may qualify for a free “service campaign/recall,” and to call for an appointment. The return address for the flier, however, lists the Norco, Calif., P.O. Box owned by Bill Heard’s advertising agency.

Randolph Evans, attorney for the Governor’s Office of Consumer Affairs, argues that if the notice was not intentionally sent, Bill Heard Enterprises would have been “more than willing to agree to stop it.” Rather than agreeing to stop the notice, Evans said, Bill Heard Enterprises persisted in asking who filed the complaints about the notice. According to Evans, this was going on for a couple of months before the lawsuit was filed.

Maguire responded by saying the dealership never refused to stop the fliers, which he said were published once in October. He added that the dealership took responsibility for the ad and acknowledged it was improper once the OCA contacted the dealership last November. Months later, Maguire continued, the dealership sued the OCA for violating the Georgia Open Records Act. The dealership was seeking to view the complaints received by the OCA, which responded with its own counterclaim.

Most complaints the consumer agency receives result in a relatively small fine and an agreement by the accused company that it will stop using deceptive trade practices. But when the agency could not get Heard to agree to sign an Assurance of Voluntary Compliance, according to Evans, it filed its suit — marking the first suit the consumer agency has filed against a dealership since 1975. The agency also hasn’t sued anyone in seven years, a local newspaper reported.

The dispute between Bill Heard and the Governor’s Office of Consumer Affairs isn’t the first, however. The dealer has had to answer to the consumer agency 15 times in the last 16 years. And in five cases, Bill Heard Chevrolet paid fines and administrative penalties totaling $279,000, according to court filings.

In the most recent case, Heard settled a case in December 2003 by agreeing to stop using ads that falsely suggested the dealer had a special relationship with GM or financing companies. It also agreed to have legal counsel review its ads before they were mailed out. Its October mailing, however, appeared to be recalling cars on the manufacturer’s behalf, the lawsuit said.

Now, the OCA is seeking monetary fines of $5,000 for each flier mailed out, or a maximum penalty of $50 million. It is also seeking a permanent injunction against Bill Heard to allow any future allegations to be brought directly to court, bypassing the administrative process.

Heard’s attorney said the company did follow all previously agreed upon steps in having its advertisements, including the October mailing, reviewed by its legal counsel, Keith A. Meador.

The changes to the flier in question were forwarded to the advertising firm in time to meet the publishing deadline, said Maguire. However, Meador’s suggested changes to the flier in question were not made due to “some type of breakdown” between the ad firm and the publisher.

According to Maguire, Dan Ryan, a representative of the dealer’s ad agency, admitted in an email, “This omission was completely innocent and resulted from a breakdown in communication between my company and the printer/mail house. Bill Heard Chevrolet had nothing to do with this omission.”

In a letter sent by General Motors on November 20, a month after the flier’s release, the automaker informed the dealer that the flier not only violated deceptive trade practices under state and federal laws, but also breached GM’s dealer agreement. Nekeidra Shegog, a spokesperson for GM, said Bill Heard did comply with the letter, but gave no further details.

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