Copy of Attack of the Attorneys General

Installment # 2- Indiana AGs $500k Consent Decree 

with A BHPH Dealer over Vehicle Pricing

For this month's installment we go to the Hoosier state, where its AG took on BHPH dealership with four locations and came away with almost $500,000 in restitution and credits to impacted consumers, as well as an agreement that the dealership won't pursue deficiency balances from previously repossessed customers. Read on folks, because this is a cautionary tale that many of you will relate to:

THE ALLEGATIONS

The AG seems to have had a lot to work with in this case. The allegations include:

• Having a different price for cash sales and financed sales, with the company website only including the lower price for cash sales;

• Failing to disclose this price increased as a cost of credit;

• Telling customers that the BHPH financing was a zero interest loan with no finance charges, even though the financed price of the vehicle was significantly higher than if the customer had paid cash

• Bait and switch, unfair deceptive acts and and other causes of action stemming from these facts.

THE OUTCOME

The Defendant dealership stores entered into a Consent Judgment with the state that included:

• Restitution in the amount of $425,917 to the affected customers;

• Additional restitution of $45,449 in the form of account credits for customers with outstanding balances;

• Prohibition against pursuing any consumer for deficiency balance on a repossessed vehicle during the period in question;

• Agreement to stop various business practices

CRUCIAL TAKE-AWAYS

If we've said it once, we've said it a thousand times: "The Price is the Price is the Price". The price shouldn't change from the website to the car-lot. It shouldn't change because in-house financing is being used versus cash versus third-party financing. If the price is increased because the vehicle is being financed, you'll find yourself hit with an undisclosed finance charge claim and all sorts of related allegations of bait and switch and unfair practices, just like this dealer.

In Bull Durham, the frustrated manager of the ballclub reprimands his poorly performing team with the famous quote: "Baseball is a simple game - you throw the ball, you hit the ball, you catch the ball". The pricing of vehicles also needs to be simple. Anything more complicated is an invitation for scrutiny from lawyers and regulators. Depending on the facts and the customer complaints, a claim of an undisclosed finance charge can also lead to claims of discrimination and violations of other consumer protection laws. This can turn into a very slippery and expensive slope.

IGNITE'S PLAN TO COMBAT AG ATTACKS

Do I have to list a price at all? What if I just want to list it on my website?

Can I just quote a down-payment?

What if I just want to quote a price and a payment? 

How about offering $500 off of the list price?

Let Ignite demystify all of these compliance questions and more and take the risk out of your program. For September, we're offering a $499 advertising review, that includes website, print advertising and social media content, to the first ten dealers that respond.  

We'll examine your website, social media, and current print ads. Then we'll produce a written report that tells you the good and bad news as well as opportunities for improvement. This is real hands-on analysis that can make a big impact on your business. Dealer advertising is an easy target for regulators because they don't even have to leave their office to find their next victims. Let Ignite provide peace-of-mind and critical insight. Email us at Info@IgniteCP.com or call us at 682-499-0325 and let's get started.