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Paula T. Dow,
Attorney General

Division of Consumer Affairs
Thomas R. Calcagni, Acting Director

 

For Immediate Release:
November 30, 2010
For Further Information Contact:
Paul Loriquet, 609-292-4791 or
Jeff Lamm, 973-504-6327
 

Elizabeth Used Car Dealer Agrees to $140,000 Settlement with State

NEWARK –The Office of the Attorney General and the State Division of Consumer Affairs have settled a lawsuit filed last year against an Elizabeth used car dealer.

Global Auto, Inc., will pay $16,537 to seven consumers in restitution, $86,462 to the State in civil penalties, and $37,000 for reimbursement of attorneys’ fees and investigative costs, under the terms of the Final Consent Judgment filed in the Chancery Division of Union County.

Additionally, Global Auto, Inc., which is not affiliated with Global Auto Mall of North Plainfield, New Jersey, will be required to adopt and strictly follow specific business practices consistent with the state’s consumer protection laws and regulations, under terms of the Consent Judgment.

According to the state’s seven-count civil complaint, Global Auto, Inc., which has also done business as Auto Collection Group, has engaged in a host of unconscionable commercial practices since its inception in or about 1999. Those practices include engaging in “bait and switch” advertising tactics, where the dealership misrepresented used vehicle prices in order to attract consumers, as well as requiring consumers to sign blank documents to effect the sales transaction. According to the lawsuit, Global Auto, Inc., also failed to pay off the loan balances on traded-in vehicles as promised, reported incorrect information to a lending institution in order to obtain loan financing for a consumer, improperly co-mingled sales documents with a dealership outside the state, and failed to disclose to consumers any prior damage to the vehicle being purchased.

"This settlement puts money back into the hands of consumers who are owed restitution by this dealership. Just as importantly, Global Auto will follow good business practices going forward or we will be back to take further action," Attorney General Paula T. Dow said.

Dow noted that $50,000 out of the $86,462 in civil penalties are suspended for a one-year period, but will become immediately due if Global Auto does not pay restitution to the seven consumers within 75 days or if the company does not abide by terms of the settlement during the one-year period. If all terms are met and no further violations occur, the $50,000 penalty will be waived.

"In today’s difficult economy, used cars aren’t cheap cars and used car purchasers are not second-class citizens. We expect, and our state laws mandate, clear disclosure of all material facts," said Thomas R. Calcagni, Acting Director of the State Division of Consumer Affairs.

The Final Consent Judgment requires that Global Auto, Inc., which has admitted to no liability or wrongdoing, to implement the following business practices:

  • to not issue temporary registrations for used motor vehicles unless it has the title to the vehicle in its possession;
  • only issue temporary registrations for used motor vehicles pursuant to a bona fide sale or lease of such motor vehicles;
  • honor the advertised sale price of a used motor vehicle;
  • honor all terms of a negotiated deal concerning the sale of a used motor vehicle;
  • provide consumers with title and registration to a motor vehicle prior to the expiration of temporary title and/or registration;
  • not misrepresent to a lending institution a consumer’s financial or other information;
  • not charge consumers for certain merchandise (i.e. warranty) and then fail to provide such merchandise;
  • when agreed upon as part of a sale, pay off all balances due lien holders on motor vehicles accepted as trade-ins no later than thirty (30) days after the sale is consummated or finalized, as long as the consumer has provided an accurate pay-off amount and has complied with all terms and conditions of the sale including, but not limited to, obtaining finance approval;
  • undertake a search of CARFAX or a similar service, to discern the prior use (i.e. rental) of a motor vehicle offered for sale and disclose such information to consumers, prior to their purchase of the motor vehicle;
  • undertake a search of CARFAX or a similar service, to discern whether a motor vehicle offered for sale has been involved in an accident or otherwise sustained damage and disclose such information to consumers, prior to their purchase of the motor vehicle; and
  • not offer for sale a motor vehicle unless the total selling price is plainly marked by a stamp, tag, label or sign either affixed to the motor vehicle or located at the point where the motor vehicle is offered for sale.

Deputy Attorney General Jeffrey Koziar of the Consumer Fraud Prosecution Section represented the state in this action. Investigator Kelly Fennell of the Division of Consumer Affairs conducted the investigation.

Global Auto Inc DBA Auto Collection Group - Final Consent Judgment

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