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Illinois Sues Chicago Auto Auction

September 20, 2005
Illinois Attorney General Lisa Madigan has sued a suburban Chicago auto auction company and its president, manager and two customer service managers for allegedly deceiving consumers through advertisements and sales tactics that falsely describe the quality of the cars being auctioned and the price of the cars.

Madigan’s lawsuit, filed in Cook County Circuit Court, names as defendants City Auto, Inc., doing business as City Auto Auction of Chicago, Inc., Yousef Abdeh, company president, Adnan Abdeh, manager, and customer service managers Waleed Shakir and Khal Shakir.

The defendants are charged with numerous violations of the Illinois Consumer Fraud and Deceptive Business Practices Act.

Madigan alleges in her lawsuit that three of the defendants – Adnan Abdeh, Waleed Shakir and Khal Shakir – have engaged in such actions previously and enlisted Yousef Abdeh, Adnan’s father, as the company’s president to circumvent previous court orders prohibiting them from participating in the auto auction business.

“City Auto Auction sells junk cars but it’s only after a bid has been placed and a down payment has been made that the consumer finds out the true value of these automobiles,” Madigan said. “We allege that these repeat offenders knew what they were doing and intentionally lured consumers into their auto auction scam.”

City Auto Auction opened for business in November 2003, and holds auto auctions every Wednesday evening and Saturday afternoon on its lot, located at 400 E. 147 th St., in Harvey. Madigan’s Consumer Protection Division has received 39 complaints against City Auto Auction from consumers in Cook, DuPage, Kankakee and Will Counties as well as out-of-state consumers from LaPorte, Indiana, and Milwaukee and Dodgeville, Wisconsin.

According to consumer complaints, City Auto Auction did not allow consumers to perform a complete inspection of the vehicles prior to the auction. The consumers were given only an hour before the auction started to visually inspect vehicles. In most cases, consumers reported that the cars were locked during this inspection period, prohibiting the consumers from checking inside the car or under the hood. The defendants actively concealed numerous defects on vehicles sold to consumers, Madigan’s lawsuit states.

One complaint filed with Madigan’s office alleges the consumer bought a car from City Auto Auction and drove it home from the auction. When the consumer rolled down the car’s window to pay for a toll, the window crashed down in the door and shattered. The consumer then saw that a wooden wedge had been inserted to hold the window up. Another consumer reported to Madigan’s office that after he bought a car, he found that the driver’s door had been welded shut.

Madigan’s lawsuit alleges that City Auto Auction misrepresented the price of their cars in their print and broadcast advertisements, including a 30-minute infomercial broadcast on CLTV, by comparing the price of their cars to prices listed in the Kelley Blue Book. City Auto Auction allegedly falsely claimed their prices are lower than the prices listed in the Blue Book without making an accurate comparison.

While City Auto Auction allegedly implies in its advertisements and fliers that consumers will pay what they bid, the consumers actually have to pay a higher amount than the bid because City Auto Auction adds an “auction fee” and “buyer’s premium.” The auction fee is an additional $99 and the buyer’s premium is a sliding scale percentage, ranging from 10 percent to more than 24 percent.

In numerous complaints received by Madigan’s office, consumers state that they believed they had purchased a vehicle for a certain price but, upon remitting the balance in full, discovered from the defendants that they owed more money. However, the consumers were already locked into their purchases because the defendants required a 25 percent non-refundable cash deposit immediately following each winning bid.

In addition, some consumers have paid such deposits and then ultimately have received vehicles that were different from the ones that they purchased.

Finally, City Auto Auction allegedly sold vehicle service contracts to consumers without disclosing the mileage of the vehicles.

In one case reported to Madigan’s office, a consumer purchased a vehicle service contract from the defendants, but the contract was of no value whatsoever because the mileage on the vehicle exceeded the contract’s limits. Madigan’s lawsuit also alleges that City Auto Auction deceptively sold vehicle service contracts to consumers even though the cars were sold “AS IS,” effectively disclaiming the warranty.

Madigan alleges in the lawsuit that Adnan Abdeh, Waleed Shakir and Khal Shakir all have been the subject of previous lawsuits filed by the Illinois Attorney General’s office for allegations of unlawful acts in the auto auction business. Adnan Abdeh was named in a lawsuit filed in 2000 against the Illinois State Public Auto Auction. In that case, the court entered an order against Abdeh prohibiting him from continuing certain business practices found to be unlawful under the Consumer Fraud Act.

In 1994, Waleed Shakir and Khal Shakir were named in a lawsuit against Sibley Auto Sales. The court entered a final order and consent decree in that case, prohibiting Waleed and Khal from participating in any retail motor vehicle sales or lease business.

Madigan’s lawsuit asks the court to prohibit the defendants from engaging in the business of auctioning and selling automobiles and from further violating Illinois’ consumer protection laws. The lawsuit also seeks a civil penalty of $50,000 and additional penalties of $50,000 per violation found to be committed with the intent to defraud. Additionally, the suit seeks $10,000 per violation committed against a person 65 or older.

Finally, Madigan’s lawsuit asks the court to order the defendants to pay restitution to consumers.

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