Bergen County Used Car Dealership Agrees to Pay Civil Penalties, Enter Binding Arbitration with Consumers to Settle Consumer Fraud Allegations
NEWARK – The New Jersey Division of Consumer Affairs today announced that a used car dealership in Leonia has agreed to change its practices, pay $20,000 in civil penalties, and enter binding arbitration with consumers who say the dealership defrauded them by refusing to honor advertised prices of vehicles, selling vehicles without providing the required written warranties, and other deceptive tactics.
The Luxury Haus Inc. (“Luxury Haus”), also known as “Luxury Haus 46” and “Benz & Beemers of 46,” agreed to the terms under a Consent Order that settles the Division’s investigation into allegations that the dealership defrauded dozens of consumers over the past three years.
“For most people, buying a used car is daunting enough without having to worry about being preyed on by dealers engaged in the kind of chicanery Luxury Haus is accused of,” said Attorney General Christopher S. Porrino. “This Order will provide just relief through binding arbitration to customers who have been allegedly deceived by this dealership.”
According to the Division, Luxury Haus allegedly committed multiple violations of the New Jersey Consumer Fraud Act (“CFA”), the Motor Vehicle Advertising Regulations, the Automotive Sales Practices Regulations, the Used Car Lemon Law, and the Used Car Lemon Law Regulations, including:
- Charging a consumer a mandatory fee for an optional service.
- Failing to install an anti-theft vehicle location service purchased by the consumer.
- Charging fees for documentary services without itemizing the price for each actual documentary service performed.
- Failing to cancel a consumer’s warranty and dent restore plan following the consumer’s requested cancellation.
- Failing to disclose prior vehicle damage.
- Misrepresenting the model of a used motor vehicle when contracting with a consumer.
The complaints against Luxury Haus were received from consumers located in Bergen, Essex, Hudson, Morris, and Middlesex counties, as well as in Pennsylvania, New York, Massachusetts, and Georgia. Consumers are seeking restitution amounts varying from approximately $3,500 to approximately $13,400.
Under the Consent Order, Luxury Haus agreed to change the way it does business, including:
- Not engaging in unfair or deceptive business practices.
- Including the required warranty in its offer for sale or sale of a used motor vehicle.
- Maintaining documentation of all advertisements of motor vehicles leased or sold to consumers for 180 days from the date of lease or sale.
- Including in its advertisements the required statement that “price(s) include(s) all cost to be paid by consumer except for licensing costs, registration fees, and taxes.”
Also under the Consent Order, for the next year the Division will refer any new consumer complaints to Luxury Haus for resolution. If the dealership disputes a new complaint or request for relief, the matter will be referred for binding arbitration.
In addition to paying $20,000 in civil penalties, Luxury Haus has agreed to pay the Division $17,661 for its investigative costs and attorneys’ fees. The State will suspend $12,422 of the settlement amount if Luxury Haus complies with the terms of the Consent Order, and does not violate the CFA, among other laws, over the next year.
Consumers who believe they were deceived or misled in doing business with Luxury Haus can file an online complaint with the State Division of Consumer Affairs by visiting its website or by calling 1-800-242-5846 (toll free within New Jersey) or 973-504- 6200.
Investigator Kelly Fennell of the Division of Consumer Affairs' Office of Consumer Protection conducted this investigation.
Deputy Attorney General Mark E. Critchley from the Consumer Fraud Prosecution Section within the Division of Law represented the State in this matter.
Seth L. Dobbs, Esq. of Archer & Greiner, P.C. represented Luxury Haus in this matter.
Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse can file an online complaint with the State Division of Consumer
Affairs by visiting its website or by calling 1-800-242-5846
(toll free within New Jersey) or 973-504- 6200.
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