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Attorney General Obtains $290,000 in Penalties from Eight Auto Dealerships

January 3, 2008

BOSTON — Eight Massachusetts auto dealerships agreed to pay civil fines after Attorney General Marth Coakley’s office charged the dealership with false and misleading print advertising. The dealerships also agreed to change their advertisement practices.

The Attorney General’s Office filed Assurances of Discontinuance in Suffolk Superior Court with The Herb Chambers Companies, Quirk Works Inc., Ira Motor Group, Kelly Automotive Group, The Colonial Dealerships (Colonial Nissan of Medford Inc., Wellesley Buick-Volkswagen Inc. d/b/a Wellesley Volkswagen, and Colonial Chrysler Jeep Inc.), Connolly Buick Co. Inc., Liberty Motorcar Inc. (formerly 128 Mazda), and Village Automotive Group. These cases are part of an overall initiative by the Attorney General’s Office targeting false and misleading advertising practices throughout the Commonwealth.

“A car may be one of the first and most expensive purchases a consumer will make in his or her lifetime,” said Attorney General Coakley. “Clarity and fairness in auto advertising is crucial so that consumers can comparison shop effectively, and so that one dealership cannot gain an unfair advantage over its competitors.”

Each of the eight dealerships agreed to pay a civil penalty ranging from $20,000 to $75,000 and to refrain from advertising practices that mislead consumers about the actual price of vehicles. The settlements specifically prohibit the use of “asterisk pricing,” a practice where a dealer advertises a price with an asterisk and, in small print at the bottom of the ad, indicates that the advertised price presumes, for example, “$3,000 in cash or trade.” The advertised price is deceptively low and not actually available. The Assurances of Discontinuance also ban advertising rebates where the terms are not clearly disclosed or universally applicable, and hiding terms and conditions in small print when the terms affect the actual price of the vehicle.

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