Company must change operations, comply with state and federal laws, and provide restitution to victims in order to resume doing business in Oregon
Attorney General Hardy Myers today announced that First American Marketing Corporation (FAMC), a Portland coupon book marketing company that operated as Community Car Service, may resume doing business in Oregon under a strict settlement agreement filed in Marion County Circuit Court. The Assurance of Voluntary Compliance (AVC) names FAMC and its owner Lewis Wayne Thayer of Portland. It does not admit violation of law.
"It is important that Oregonians who did business with this company and filed complaints against it understand that in order for the company to resume operations, it must comply with a long list of requirements," Myers said. "FAMC must pay restitution to some complainants, make changes in its operational procedures and comply with both state and federal laws. We intend to monitor future Oregon activities of this company to make sure it complies with all aspects of the agreement."
Known by most complaining consumers and businesses as Community Car Service, the company sold "car care program" vouchers, door-to-door to consumers, for $79.95. The vouchers were redeemable at specific auto repair shops and included a certain number of "free" oil changes and various other "free services" including a transmission performance analysis and brake adjustment and inspection. The auto repair shops featured on the vouchers were told by FAMC that its product was an effective marketing tool. Instead of receiving a portion of the voucher sales, the shops provided the "free" services and hoped the vouchers would generate future business.
Voucher purchasers complained that during the sales pitch, FAMC employees represented that they were from the repair shop when they were not and misled consumers about the services the shop would provide and during what hours. The salespersons also failed to explain the consumers' rights to a three-day rescission period if they later decided they did not want the vouchers. Information on the three-day right of rescission, required under both state and federal law, was also not included in the voucher's written materials.
Businesses complained that they only discovered that the company had sold more vouchers than was agreed upon when large numbers of consumers arrived with coupons that the businesses couldn't afford to redeem. The shops also complained that the coupons featured services that they didn't provide such as oil changes. During a 2006 investigation by the Oregon Department of Justice (DOJ), FAMC was uncooperative and would not comply with a Civil Investigative Demand (CID) for written documents. The Marion County Circuit Court then ordered FAMC to appear at a hearing to explain its non-compliance with the CID but the company failed to appear. In May 2006, the company was enjoined from operating in Oregon. DOJ continued to receive new complaints about the company and was prepared to file a contempt action when the company finally agreed to cooperate and sign an AVC.
Under the AVC, the company must provide restitution to certain consumers who file complaints against them with DOJ, with other law enforcement or with organizations such as the Better Business Bureau. FAMC also must cease collection activities against all consumers who filed a complaint and must correct any derogatory information on those consumers' credit reports.
FAMC agreed to comply with Oregon's Home Solicitation Sales statute and also agreed that its employees will not misrepresent their employer during solicitations. In future dealings with businesses, FAMC must verify the coupon details with the repair shops including the exact services offered and the store hours when services are available.
In addition to FAMC paying restitution, the agreement also requires FAMC to pay $25,000 to the DOJ Consumer Protection and Education Fund with $20,000 to be suspended if $5,000 is paid over the next 18 months and all requirements of the AVC are met.
Consumers wanting information about this case and consumer protection in general may call 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. DOJ is online at www.doj.state.or.us.
Jan Margosian, (503) 947-4333 (media line only) firstname.lastname@example.org