Judge Faults Car Dealers' Sales Tactics

Attorney General Spitzer today praised the ruling of a Dutchess County judge who found that two local car dealers had committed a series of fraudulent and deceptive acts against their customers.

In granting the Attorney General's petition, Justice Ralph A. Beisner ordered Poughkeepsie Ford, Inc., and G & C Motor Works, Inc. and their principal officers, Mark Grossman and Richard T. Grossman to pay over $177,000 in refunds and civil penalties.

In holding the owners personally liable, the decision forces both of the Grossmans to reimburse over $21,000 to certain consumers and pay an additional $100,000 to the Attorney General pending further proceedings.

The decision also orders Poughkeepsie Ford and G & C Motor Works to pay nearly $55,000 in civil penalties for repeated deceptive business practices. A court appointed referee will determine if additional penalties will be imposed.

"This decision should send a strong signal to auto dealers that these unscrupulous practices will not be tolerated," Spitzer said. "Cases such as this make it more difficult for reputable dealerships to develop positive and trusting relationships with their communities and their customers."

In ruling on this case, the judge affirmed the allegations made by the Attorney General's Office that Poughkeepsie Ford and C & G Motor Works engaged in the following illegal acts:

• repeated false and misleading advertising;
• failure to return deposits;
• failure to return a customer's own vehicle;
• misrepresentations of a consumer's right not to go forward with a purchase;
• increasing the price of a vehicle or the finance rate without advising the consumer;
• adding unwanted options, such as rustproofing and extended service contracts;
• failing to include the odometer reading on documents and misrepresenting odometer readings on other vehicles;
• removing federally-required manufacturer's suggested retail price labels and charging more than such stated price; and
• failure to honor repair claims and warranties.

Due to the significant number of consumer complaints, the judge assigned a court-ordered referee, Herbert Wallace, Esq. of Poughkeepsie, to more closely examine each case and to determine refund amounts. In addition, the Grossmans were ordered to pay the referee's retainer fee of $10,000 and a $200 hourly rate.

Spitzer said that over 150 consumers have already come forward with complaints about both Poughkeepsie Ford and G &C Motor Works.

Consumers have until November 11, 1999 to file a complaint with the Attorney General's Office in order to be eligible for a refund. Any individuals interested in doing so are encouraged to call the consumer hotline at (800) 771-7755.

Spitzer also praised the work of the Poughkeepsie Regional Office staff, Assistant Attorneys General Lynn Tabbot and Mary Kavaney as well as Thomas Conway, Chief of the Consumer Frauds and Protection Bureau.