Attorney General Hardy Myers today filed a $300,000 multi-state settlement agreement with a national marketing group for not only misleading consumers in advertisements about reasons for an auto sale and supposedly low prices but for conducting sales events with unlicensed salespeople. Named in today's Assurance of Voluntary Compliance (AVC) filed in Marion County Circuit Court are two Milford, Ohio corporations, Gunning & Associates Marketing Inc. and Fleet Liquidators of America, Inc. Also listed are Fleet Liquidators of America, National Fleet Liquidators, G & A Marketing, and G & A Marketing, Inc., dbas of Gunning & Associates Marketing, Inc. The AVC admits no law violation.
"Gunning and Associates not only lied about a major rental car company liquidation sale in its direct mail pieces to thousands of car-buying consumers but bragged about 'low downs' and monthly payments that were totally untrue," Myers said. In Oregon, the flyers named Fleet Liquidators of America as assisting with the sale and included fictitious prices of $59 down and $79 a month.
Beginning in 2004, Oregon, nine other states and a California District Attorney investigated the promotions leading up to the sales and how the actual sales were conducted. Investigators found that G & A contracted with dozens of dealerships throughout the United States getting paid up-front advertising fees and percentages of both the "front end" and "back end" profit for each vehicle sold. Not only did the salespeople work on commission but because G&A guaranteed dealerships $100,000 profit over a four-day-sale, the salespeople had to "payment pack" in order to cover both the dealership and G & A's profits.
In addition to the misleading marketing, G & A sent as part of the package onsite salespeople and a finance and insurance (F&I) manager, all of which were illegally selling automobiles without proper state licensure or without state licenses to handle insurance sales.
Attorney General Myers explained that unsuspecting car buyers were injured in other ways including the company creating the impression that the sales were special when they were not; the company encouraging aggressive sales techniques in order to get the highest possible profits for the dealerships; and the salespersons pushing purchase and monthly payment amounts instead of providing the actual price of the vehicle in order to confuse buyers into paying more than a vehicle is worth. In addition, G & A employees added charges for extra products and services that were not authorized or even desired by consumers.
Under the agreement filed today, the company must change the way it does business by complying with pertinent state and federal consumer protection and licensing laws. The company must follow a "laundry list" of operating procedures including, within the next 90 days, providing notice of the Assurance to any salespersons acting on their behalf in future sales events.
Effective immediately, the company must for the next five years send advertising copy to be used in auto sales in the states of Oregon, California and Tennessee to the respective Attorneys General at least 14 days prior to publication or dissemination.
The total $300,000 in restitution will be paid in two payments, one by October 2006 and by January 2007. As lead state for the case, Oregon will keep $40,000 for restitution, costs, education and other consumer protection purposes and distribute the remainder in varying amounts to the other nine participating states of Iowa, Washington, California, Delaware, Florida, Maine, Tennessee, Vermont, and North Dakota and the District Attorney of Tulare County, California.
"Not only is this a good settlement for car-buying consumers everywhere but it sends a strong message to those 'copy cat' companies operating through out the United States to stop the practice or be prosecuted by law enforcement," Myers said.
In Oregon, the following car dealerships "hosted" G & A sales and are currently operating under settlement agreements with the Department of Justice:
Cascade Auto Group of Klamath Falls;
Coos Bay Toyota;
Skinner AutoPlex of Medford; and
Curt Warner Chevrolet of Vancouver, Washington.
The Oregon Department of Justice has settled with the following "copy cat" companies and car dealers, who used "copy cat" marketing companies:
Thrifty Car Sales Bend, using Dynamic Force Super Sales of Louisiana, and Dynamic Force Super Sales;
Curt Warner Chevrolet of Vancouver, Washington using Smart Automotive Group of Louisiana to send direct flyers to Oregon; and
Kirby Car Company of Tigard and Newberg Dodge Chrysler Plymouth using U.S. Marketing Direct of Florida.
Consumers wanting more information about consumer protection in Oregon 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. Oregon Department of Justice is online at www.doj.state.or.us.
Jan Margosian, (503) 947-4333 (media line only) email@example.com