Two New York car dealers have agreed to pay restitution to consumers who unknowingly purchased former rental cars. Meanwhile, Illinois has filed suit against an Ohio-based ad agency that created ads trumpeting the sale of low-priced cars allegedly available because a major rental car company had gone bankrupt, as well as the dealer who sponsored the ads.
New York Attorney General Eliot Spitzer said his office has obtained agreements with DeNooyer Dodge of Albany and Haynes Ford in Hoosick. Each agreed to pay restitution to consumers and to implement practices to ensure that customers are appropriately notified that a used car was formerly a rental car.
"Consumers deserve accurate and complete information about vehicles they are considering for purchase or lease," Spitzer said. "My office will continue to aggressively enforce the state law that requires auto dealers to provide notice about a vehicle's prior use as a rental car so that consumers can make informed decisions about whether they want to purchase that car and what the value of that car might be."
In settling the investigations, both auto dealers agreed to pay $1,500 to each consumer who unwittingly purchased former rental vehicles without proper notification. DeNooyer Dodge will pay restitution to at least twelve consumers and Haynes Ford will pay restitution to at least nine consumers, resulting in $33,000 in refunds in total.
Both dealerships also agreed to pay restitution to additional consumers who file bona fide complaints that they recently purchased a vehicle from either auto dealership and were not properly notified of the vehicle's prior history as a rental car.
In the Illinois case, one ad featured a screaming headline urging prospective car buyers to BE AWARE. MAJOR CAR RENTAL COMPANY HAS GONE BANKRUPT. Vehicles Released to the Public for Immediate Sale. Another ad carries an important, official-sounding NOTICE TO THE PUBLIC. MAJOR RENTAL CAR COMPANY HAS GONE BANKRUPT.
In fact, the attorney generals office found no evidence of a bankruptcy filed by a large rental car agency.
Advertising agencies and the dealerships that hire them are not allowed to make up whatever they think will bring the customers to the lot. The ads must be accurate, Madigan said. Consumers reading these ads may have gone down to these dealerships to look at one of these vehicles only to find that they did not exist. This is misleading, and it is illegal.
Madigans office already has sued a Des Plaines auto dealer for running a similar ad in Chicago in April. Madigan today amended the April lawsuit to add the advertising agency as a defendant.
Madigans new complaint was filed in DeKalb County Circuit Court against Joyce Pontiac GMC and Jeep Eagle, Inc., and Gunning & Associates Marketing, Inc., for violations of the Illinois Consumer Fraud and Deceptive Practices Act.