Oregon Department of Justice

Attorney General Ellen F. Rosenblum

Oregon Department of Justice - Attorney General Ellen F. Rosenblum
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AG ANNOUNCES SETTLEMENTS WITH AUTO DEALERSHIPS FOR MISLEADING ADVERTISING, 'BUSHING' & FREE GAS OFFER

November 6, 2006

Attorney General Hardy Myers today announced the filing of settlement agreements with two Eugene new car dealerships and a Portland used car company for misleading advertising in the areas of credit, free gas offers and unclear sponsorship of sales. Named in Assurances of Voluntary Compliance filed in Lane and Multnomah County Circuit Courts are Carmart, Inc., doing business as Car Mart of Portland and JKC Automotive, Inc., doing business as Kiefer Kia, Kiefer Mazda, Kiefer Mazda-Kia, Kiefer's Eugene Mazda, Kiefer's Kia, Kiefer's Mazda and U.S. Auto Wholesale, all owned by John P. Kiefer, president, of Eugene. The AVCs admit no law violation.

"Buying a new or used car can be a very emotional and expensive experience for consumers," Myers said. "But when dealerships purposefully confuse buyers in advertising as to whom they are dealing with and exactly what type of deal they are getting, our office must step in and stop the conduct."

Oregon Department of Justice staff, which regularly monitors automobile advertising and marketing campaigns throughout the state, found a direct mail flyer from Car Mart enticing consumers into the dealership with a "false credit offer." Consumers, who had filed for bankruptcy, were promised "great opportunities" through a pre-qualified certificate, which supposedly was good for up to $24,995. Justice staff later discovered that consumers were not pre-qualified for any loan.

Justice staff received numerous consumer complaints against Car Mart.  The majority of these complaints alleged that Car Mart refused to unwind the deal, return deposits and the consumers trade-in vehicles when the company was unable to obtain financing as negotiated. The dealership must do all three under Oregon's 'bushing' law, or be in violation of the Unlawful Trade Practices Act.

In other advertisements, Kiefer's U.S. Auto Wholesale, a registered dba of JKC Automotive but not a licensed dealership through the Oregon Department of Motor Vehicles (DMV), supposedly held a "Vehicle Disposal" sale with the Gateway Mall in Springfield as the "exclusive Oregon location" for a "West Coast Auto Disbursement" sale. Since the sale was a Kiefer sale, there was no "exclusive Oregon location" and no "West Coast" sale.

On an electronic billboard at the entrance to Kiefer's Eugene Kia dealership, consumers were offered "free gas." In newspaper advertisements, Kiefer further offered "buy a new Kia get gas for a year," and individual cars were listed as coming with "gas for a year." In "mice" type under each offer, the company stated that the deal was a "combination offer." Consumer were told in barely readable type to "make your best deal on a package price…Gas Offer is $500 Gas Card." DOJ staff found the ads to not be clear and conspicuous and $500 would not cover gas for a year for a typical driver.

Under the CarMart Inc. agreement, the company must comply with the credit repair statutes, the state "bushing" law and agree to permanently close CarMart. Kiefer also agreed to not open another used car store in the Portland metro area for at least one year and to pay $1,000 to the DOJ Consumer Protection and Education Fund.

The JKC Automotive, Inc. settlement sets several conditions in which Kiefer can advertise including only selling under names of dealerships licensed with DMV. The company, for one year, must send copies of all advertisements and direct mail flyers to Justice staff 14 days before publication.

JKC Automotive paid $9,000 to the DOJ Consumer Protection and Education Fund.

Consumers wanting more information about this agreement and consumer protection in Oregon 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. Justice is online at www.doj.state.or.us.

Contact:

Jan Margosian, (503) 947-4333 (media line only) jan.margosian@doj.state.or.us |
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