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.
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