Auto Dealer Agrees To Reform Advertising Practices

Attorney General Spitzer today announced a settlement with an Otsego County auto dealership related to false and misleading advertising.

Royal Chrysler Oneonta, Inc. settled an investigation and agreed to pay $6,000 in penalties and costs to the state.

"My office will continue the effort to ensure auto dealers across the state comply with federal and state laws aimed at keeping advertising truthful and nondeceptive," Spitzer said.

An investigation by Spitzer's office revealed that Royal Chrysler Oneonta engaged in a pattern of false advertising with ads that:

• Lured consumers with offers of sales tax exemptions that only applied to vehicles predominantly used in farming operations;
• Misled consumers about the dealer's ultimate cost for a vehicle;
• Falsely implied that every customer would get $3,000 off the purchase price of a vehicle regardless of the condition of their trade-in;
• Falsely implied that the dealership would pay-off the balance of a consumer's loan if they purchased a vehicle when, in fact, the outstanding loan balance would be rolled into the financing for a newly purchased car;
• Falsely implied that a sales is being conducted by someone other than the dealership and that, as a result, consumers would be able to purchase vehicles at a lower price;
• Violated federal rules when enticing consumers with "free" gifts since a vehicle's negotiated price had the cost of the gift factored into it.

This case is the latest in an on-going effort by Spitzer's office to monitor auto advertising and sales practices throughout the state. Since 1999, Spitzer's office has commenced nearly 190 enforcement actions against auto dealers across the state, the vast majority of which involved violations of federal and state laws that regulate auto advertising.

This case was handled by Assistant Attorney General Michael Danaher of the Binghamton Regional Office.

Individuals with questions or complaints about auto dealerships are encouraged to contact Spitzer's consumer help line at (800) 771-7755.