NEWARK – Attorney General Gurbir S. Grewal and the Division of Consumer Affairs today announced that the Division has reached settlements in three separate investigations into alleged consumer fraud in New Jersey’s automotive sales industry.
The three businesses – two North Jersey auto dealers and a Cranbury-based internet seller of automotive parts and accessories – all agreed to change their business practices, pay civil penalties, and agree to binding arbitration to resolve consumer complaints in order to conclude investigations into alleged violations of the Consumer Fraud Act (CFA), and other consumer protection laws and regulations.
“New Jersey consumers deserve to get what they pay for, whether they’re spending thousands of dollars on a vehicle at a dealership or paying a couple bucks for an auto part online,” said Attorney General Grewal. “As these settlements demonstrate, we will vigorously enforce the laws in place to protect consumers from fraud in the sale of autos and aftermarket parts and hold violators accountable.”
Auto Mall 46, Inc.;Edison Motor Sales, LLC; Hamilton Automotive Enterprises, L.L.C.; Route 46 Chrysler, LLC; 46 Auto Imports, L.L.C.; Route 46 Subaru, LLC; and Meadowlands Auto Sales, LLC (“Auto Mall 46 et al.”) which collectively do business under 10 dealership names, agreed to a $219,927 settlement – which includes $200,000 in civil penalties – to resolve allegations that the dealerships violated the CFA, the Used Car Lemon Law, and associated regulations governing the sale and advertising of motor vehicles in conduct that includes:
- misrepresenting the price of motor vehicles, aftermarket merchandise, and dealer-installed options on aftermarket contracts, sales documents, and lease documents by altering the price on the contract to reflect an amount other than that paid by the consumer, by omitting the price paid by the consumer on the contract, or by listing the price as “N/A” when the consumer in fact did pay for them;
- advertising motor vehicles for sale or lease at an advertised price but then refusing to sell or lease the same vehicles unless consumers agreed to pay $2,000 more than the advertised price; and
- misrepresenting to at least one consumer that her security deposit would not be cashed and that the sale transaction was refundable but then depositing her security and refusing to refund the transaction.
In a Consent Order with the Division, Auto Mall 46 et al. also agreed to enter binding arbitration through the ADR Unit to resolve seven complaints from affected consumers, and to resolve any additional consumer complaints received by the Division for a period of two years.
Comfort Auto Group LLC, d/b/a Route 46 Hyundai (“Comfort Auto Group”) in Hackettstown, agreed to a $55,286 settlement – which includes $39,740 in civil penalties and $9,117 in consumer restitution – to resolve allegations that the dealership violated the CFA, the Used Car Lemon Law, and associated regulations governing the sale and advertising of motor vehicles in conduct that includes:
- charging consumers for dealer-installed options and/or aftermarket merchandise that had been identified as included free of charge;
- failing to provide consumers with a written warranty, as required by law; and
- failing to include mandatory disclosure language in advertisements.
In a Consent Order with the Division, Comfort Auto Group also agreed to enter binding arbitration through the Division’s Alternative Dispute Resolution (ADR) Unit to resolve any additional consumer complaints received by the Division for a period of one year.
Onyx Enterprises Int’l Corp., (“Onyx”) a Cranbury-based online company doing business as CARiD.com, agreed to a $28,696 settlement – which includes $16,000 in civil penalties – to resolve a Division investigation into allegations that the company violated the CFA and the regulations governing general advertising in conduct that includes:
- failing to clearly and conspicuously post certain disclosures on its website relating to its cancellation, substitution, refund and return policies;
- representing “100% Satisfaction” on its website, but its return policy provided that certain merchandise – i.e. all wheel and tire packages or merchandise classified as “custom”- could not be returned; and
- representing “Easy Returns” on its website and in order confirmation emails, but then it was difficult for certain consumers to return the merchandise.
In an Assurance of Voluntary Compliance with the Division, Onyx also agreed to enter binding arbitration through the ADR Unit to resolve 22 complaints from affected consumers and to resolve any additional consumer complaints received by the Division for a period of one year. For a period of 15 months, an attorney for the company will serve as a designated consumer liaison to facilitate resolution of complaints from affected and additional consumers, and to submit reports tracking the status of those complaints to the Division.
Additionally, under the terms of the three settlement agreements, all respondents are prohibited from engaging in any unfair or deceptive acts or practices in conducting business in the State; and must make changes to their business practices to comply with all federal and state consumer protection laws and regulations.
“For many, buying a car is one of the biggest financial decisions of their lives. Keeping one in good working condition can be essential for maintaining a livelihood and taking care of loved ones. The Division takes consumer complaints very seriously. We vigorously investigate and take action against businesses whose deceptive practices undermine the integrity of New Jersey’s marketplace,” said Paul R. Rodríguez, Acting Director of the Division of Consumer Affairs. “The settlements announced today not only hold these businesses accountable for alleged illegal conduct, they put measures in place to help ensure compliance with the law going forward.”
Investigator Luis Zuniga, of the Office of Consumer Protection, conducted the Auto Mall 46 et al. investigation.
Investigator Jared O’Cone, of the Office of Consumer Protection, conducted the Comfort Auto Group investigation.
Investigator Kristen Higgins, of the Office of Consumer Protection, conducted the Onyx investigation.
Deputy Attorney General Chanel Van Dyke, of the Consumer Fraud Prosecution Section within the Division of Law, represented the State in the Auto Mall 46 et al. settlement.
Deputy Attorney General Robert N. Holup, of the Consumer Fraud Prosecution Section within the Division of Law, represented the State in the Comfort Auto Group and Onyx settlements.
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