Attorney General Hardy Myers today filed a second, major court action in less than four years against one of the state's largest automobile groups for violations of a 2001 agreement concerning misleading advertising and for circumventing the state's anti-bushing laws. Named in an Assurance of voluntary Compliance filed this morning in Marion County Circuit Court are Asbury Automotive Oregon LLC, a Delaware limited liability company, doing business in Oregon as Thomason Autogroup, and all of their affiliated Oregon dealerships. The agreement admits no violation of law.
"Just because Asbury is one of the biggest in the automobile industry doesn't mean it can willfully ignore Oregon's consumer protection laws," Myers said. "When we caught Asbury/Thomason Autogroup in 2001 selling cars to consumers for thousands of dollars more than the advertised sale price, we were surprised at their brashness but frankly, we were shocked to find that not only were Asbury's dealerships ignoring our earlier agreement but were committing new violations of the Unlawful Trade Practices Act."
Department of Justice staff closely monitored the advertising and business activities of Asbury and its Thomason dealerships after 2001 when they admitted to advertising car sales through "spot" ads in the classified sections of many Oregon newspapers and then not disclosing the sale to buyers and selling them for thousands more than the advertised price. Thomason paid over $1.5 million in restitution as well as $300,000 to the Justice Consumer Protection and Education Fund.
As part of the 2001 agreement, Thomason dealerships also were required, when financing for a vehicle was not available, to return the buyer's trade-in and refund the down payment. This was to be done before entering into any negotiations for different financing terms or a different vehicle. In 2003, Justice investigators learned that Thomason Toyota of Gladstone was not in compliance with the court agreement by having customers sign an acknowledgement of the possibility of renegotiation, if financing fell through, at the inception of the transaction, rather than when financing was actually denied.
Furthermore, the Gladstone Toyota dealer wasn't offering a full recession and termination of the original contract when financing fell through before trying to talk consumers into signing new deal, mostly with higher interest. This practice is known as "bushing."
In March 2004, the Thomason Honda dealership in Gladstone advertised an offer in large, bold print of "35 PERCENT OFF MSRP (Manufacturer's Suggested Retail Price) ON ALL HONDAS IN STOCK!!" In very small type above the offer, the dealership posted "Dealer Installed Options Discounted." The offer was clearly misleading, as the dealership soon discovered, as large numbers of angry customers arrived to buy a new Honda at a 35 percent reduction, only to find the discount was for dealer installed options. The dealership closed its doors early that day and remained closed the next day. More than 30 consumers filed complaints with Justice concerning the alleged fraudulent advertising.
After lengthy negotiations concerning the defendants' "bushing" and advertising violations, Asbury and Thomason agreed to pay $250,000 to the Justice Department consumer protection and education account.
Under today's settlement agreement, the defendants must comply with the Unlawful Trade Practices Act and the terms of the prior court order especially in the area of "bushing." The defendants must designate an employee to ensure legal compliance of all of their advertising and promotional materials prior to publication, and they must offer "35 PERCENT OFF MSRP" of any new Honda to 23 consumers, who filed complaints with the Attorney General, concerning the misleading advertisements. The buyers must be authentic individuals, who want to buy a car for their own personal use.
Consumers wanting more information about today's agreements for other consumer protection issues in the state may contact the Attorney General's consumer hotline at (503) 378-4320 (Salem area only), (503) 229-5576 (Portland area only), or toll-free at 1-877-877-9392. Justice is online at www.doj.state.or.us.
Jan Margosian, (503) 947-4333 (media line only) firstname.lastname@example.org