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Sage to Pay $3.6 Million to Settle FTC Charges

March 14, 2017

In September, the Los Angeles-based Sage Automotive Group was accused by the FTC of engaging in illegal and deceptive practices in the sale and financing of its vehicles. Photo by Thomas Pintaric
In September, the Los Angeles-based Sage Automotive Group was accused by the FTC of engaging in illegal and deceptive practices in the sale and financing of its vehicles. Photo by Thomas Pintaric

WASHINGTON — Sage Automotive Group, which includes nine dealerships in the Los Angeles area, has agreed to pay more than $3.6 million to settle charges leveled by the Federal Trade Commission. Two of the group’s co-owners, brothers Joseph and Michael Schrage, as well as its holding and management companies, were named in the regulator's announcement.

The FTC said the funds were marked for return to customers in order to settle charges that Sage used deceptive and unfair sales and financing practices, deceptive advertising, and deceptive online reviews. The proposed settlement order, which will be filed in the U.S. District Court for the Central District of California for approval, will prohibit the defendants from making misrepresentations relating to their advertising, add-on products, financing, and endorsements or testimonials.

The proposed order will also bar the defendants from engaging in other unlawful conduct when a sale is canceled, such as failing to return any down payment or trade-in or seeking legal action, arrest, repossession or debt collection unless the action is lawful and the defendants intend to take such action. It also prohibits them from violating the Truth In Lending Act and Regulation Z, and the Consumer Leasing Act and Regulation M, according to the FTC.

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