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FOR IMMEDIATE RELEASE
November 17, 2011
Whatcom County car dealer settles claims of fudging loan docs, deceptive sales practices

SEATTLE – The owners of a Whatcom County car dealership will pay penalties and attorney’s fees to settle allegations by the Washington State Attorney General’s Office of deceptive sales and advertising practices. Not admitting any wrong-doing, the owners agreed to comply with the law.

On November 16, 2011, the Attorney General’s Consumer Protection Division filed a complaint and consent decree with RHLI, Inc., the owner of Dewey Griffin Buick-GMC-Subaru.  In that complaint, the Attorney General alleged that RHLI “power booked” loans by misrepresenting the value of vehicles to banks.  “Power booking” involves a dealer listing phantom options such as sun roofs, luggage racks, sport packages, in order to qualify customers for loans.

“A dealer is prohibited by law from fudging or making misrepresentations in loan documents,” Assistant Attorney General Mary Lobdell said.  “As we unfortunately witnessed in the housing meltdown, misleading or inaccurate documents can have terrible consequences for borrowers and lenders alike.”

The AG’s Office made a series of additional accusations – that were denied by RHLI, but are now resolved by today’s settlement – including:

  • Creating a false sense of urgency in advertisements, such as “Emergency Sell-Off” in violation of state law.
  • Failing to disclose conditions or restrictions related to sales offers by, for example, sending out mailers advertising vacation packages with each test drive without also mentioning that the prize required the payment of taxes and fees along with other restrictions.
  • Failing to comply with the Truth in Lending Act.
  • Misleading consumers with deceptive savings by advertising “40% off orig. MSRP” for used vehicles when the MSRP is not the industry standard for pricing used vehicles. 
  • Failing to clearly and conspicuously disclose the number of vehicles available at the advertised price in close proximity to the offered price.
  • Violating the Promotional Advertising of Prizes Act by misrepresenting prizes through, for example, a “Match and Win” sales event that offered, a $300 gas card that was actually a voucher requiring a $5.00 redemption fee along with the monthly collection of a $100 of gas receipts to FreeBeeGas.com in return for a $25.00 gas card.  Unknown to Dewey Griffin, FreeBeeGas.com was a fictitious name used by Tidewater Marketing who had its doors closed by the Florida Attorney General for deceptive practices.
  • Advertising merchandise as “free” when in fact the item was not free, but included in the negotiated price of a vehicle, in violation of Federal Trade Commission guidelines on advertising as well as industry standards.
  • Advertising to Canadian consumers that “GST IS FREE” when in fact Canadian buyers are responsible for the payment of Government Sales Tax (GST) as well as for paying export costs related to vehicles brought into the state as trade-ins. Such advertising also violates British Columbia’s laws.

As a result of today’s settlement, RHLI, Inc., agrees to penalties of $100,000 with $90,000 suspended, $40,000 in attorney’s fees and $1,345.15 in costs, for a total judgment of $51,345.15

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Contacts:
Janelle Guthrie, Director of Communications, (360) 586-0725

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