Company Operating Car Dealerships In New Jersey Which Was Sued By New Jersey Attorney General For Consumer Fraud and Used Car Lemon Law Violations Agrees to Pay $450,000.00

The New Jersey Attorney General’s Office and New Jersey Division of Consumer Affairs sued a company operating car dealerships in Camden County, alleging the company violated the New Jersey Consumer Fraud Act, , Motor Vehicle Advertising Regulations, Used Car Lemon Law and Used Car Lemon Law Regulations and a 2001 settlement agreement that the company entered into with the State.

Foulke Management Corporation did business as “Cherry Hill Triplex” and operates Cherry Hill Dodge, Cherry Hill Jeep Eagle, Cherry Hill Kia, Cherry Hill Mitsubishi and Mt. Ephraim Chrysler/Dodge.

The Attorney General alleged that Foulke Management Corporation engaged in a marketing campaign with the advertising pitches “$8,000 GUARANTEED FOR YOUR TRADE,” “no credit check” and “you instantly qualify, regardless of your credit.”   The New Jersey Attorney General claimed “This company allegedly advertised great deals that, in reality, were not available at its dealerships” and that “This was a typical bait and switch operation. We will not tolerate such deceptive practices.”   The New Jersey Division of Consumer Affairs received over 100 consumer complaints from Cherry Hill Triplex customers to date.   The New Jersey Consumer Affairs Director claimed that “These car dealerships promised to take the high road in dealing with customers but the volume of complaints we’ve received tell another story.”   “We expect an open and honest transaction when a consumer spends thousands of dollars on a new or used vehicle.”

According to the New Jersey Attorney General, Foulke Management Corporation committed the following acts at its dealerships:

• Not honoring a “guaranteed” ad offer of $8,000 for each trade-in vehicle;
• Advertising that a consumer would qualify for credit, then failing to provide credit to the consumer;
• Using “bait and switch” pricing practices by planning to sell motor vehicles at a price higher than the advertised price, failing to honor the advertised price and advertising a motor vehicle that was not for sale;
• Failing to honor the advertised sales and/or lease price of a motor vehicle;
• Misrepresenting the lowest available Annual Percentage Rate (APR) on consumer loans;
• Failing to disclose that the motor vehicle had previously been damaged and that substantial repair or body work had been performed;
• Failing to disclose to consumers prior to purchase or lease that a motor vehicle had been used as a rental vehicle;
• Failing to disclose, adjacent to the motor vehicle’s advertised price, that the price includes deductions for a manufacturer’s rebate and/or dealer’s discount;
• Otherwise using small print, graphic illustrations and location to obscure material facts in its advertisements;
• Failing to maintain copies of applicable advertisements within 180 days of a sale or lease transaction; and
• Failing to submit the required Used Car Lemon Law fees and documentation.

In 2001, under the Assurance of Voluntary Compliance with Consumer Affairs, the company agreed to pay a $40,000 penalty and to operate lawfully in the future.

After the New Jersey Attorney General filed suit in the Superior Court of New Jersey, Camden County, the company agreed to settle the case with the State.   The company did not admit to any wrongdoing or liability.  However, the company promised to pay $450,000 for consumer restitution, investigation costs and the State’s attorney’s fees.   In addition, the company agreed to pay $300,000 in civil penalties, which were suspended.   The company also agreed to honor its advertised credit and allowance offers and  to clearly display the total sales prices on vehicles.   

Car Dealer Commits Consumer Fraud By Charging Consumer For Pre Delivery Services After the Consumer Refused To Buy Those Services

A car dealership, Garden State Auto Park, violated the New Jersey Consumer Fraud when the automotive dealership charged the consumer for predelivery services such as rustproofing, undercoating, paint sealer and fabric guard, that the consumer explicitly rejected and that were not disclosed on the car’s final sales agreement. 

Dealer Violated New Jersey Consumer Fraud Act when advertising cars below dealer invoice

A car dealership, Arrow Pontiac, Inc., violated the New Jersey Consumer Fraud Act when it advertised automobiles as being "priced well below dealer invoice."

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A car dealership, Red Bank Volvo, Inc., violated the New Jersey Consumer Fraud Act  when it failed to include in its advertisement a statement that a "sign and drive" leasing program was subject to a credit check, because the automotive dealership failed to state all disclaimers, qualifiers or limitations that in fact limited, conditioned or negated a supposed unconditional offer clearly and conspicuously and next to the offer instead of in a footnote identified by an asterisk.

Dealer Violated New Jersey Consumer Fraud Act By Placing Used Automobile Advertisement Through Advertising Agency

Fay American Jeep, Inc. and Arrel Datsun placed an advertisement through an advertising agency for the sale of a used automobile which failed to disclose its bona fide odometer reading (mileage).  The Court explained that the mileage of a used car is critical to its sales value and that in New Jersey it is unlawful to misrepresent the mileage of a used car by changing the odometer so as to show lesser mileage.  The Court found that both dealerships and the advertising agency who placed the advertisement were guilty of violating the New Jersey Consumer Fraud Act.

Dealer Violated New Jersey Consumer Fraud Act By Advertising Automobile At The Wrong Price

A consumer appeared at Ocean Dodge in response to an advertisement in "The Auto Shopper" which advertised an automobile for sale at $4,985.  The consumer and a representative of the automotive dealership negotiated the sale of the automobile for a purchase price of $2,985, plus two trade-in vehicles and the consumer signed a written agreement for the purchase price and the trade-ins and paid a $30 deposit. The automotive dealership’s representative did not sign the agreement.  When the consumer returned to the automotive dealership with her trade-ins the consumer was informed that there had been a mistake in the advertisement and that the price was not $4,985 as advertised but was $7,165.  The automotive dealership’s representative stated that the van could not be sold for the advertised price of $4,985 and further, that the consumer’s trade-ins were unsatisfactory.  The parties attempted re-negotiation of the sale for a price of $5,695 without trade-ins but the agreement was not finalized because the consumer refused to sign a release as to the automotive dealership’s potential liability for the erroneous advertising.  The automotive dealership tried to claim that they made a simple advertising error but the Court didn’t buy it, especially since there was a significant ($2,180) disparity in the price written up by the automotive dealership’s representative in the original agreement, $4,985, and the actual price of $7,165.  The Court determined that the automotive dealership engaged in a plan or scheme not to sell a motor vehicle as advertised or not to sell it at the advertised price. 

Used Car Dealer Violated New Jersey Consumer Fraud Act By Misstating The Vehicle’s Mileage And Misrepresenting The Sale As One By An Individual Rather Than By A Dealer

Enterprise Motors, Inc. advertised a used 1996 Volkswagen Jetta without listing Enterprise as the seller and disguised the sale as one by an individual occurring at the front yard of a house instead of through an automotive dealership.  The advertisement did not refer to Enterprise or indicate that the sale was by a dealer and stated that the Jetta had 42,000 miles and was listed at $4,300.  But when the consumer went to the house to inspect the car, he was told that there was a typo in the advertisement and that the vehicle had 65,000 miles instead of 42,000.  Also, the consumer was told he could not test drive the car because it had no license plates, but he was assured that it was in good running order.   The consumer was never told that the car was being sold by used car dealers.  After the car was delivered to the consumer, he discovered a transmission problem and called the person from whom he took delivery and the consumer was instructed to take it to a person’s home.  The consumer did so and about a week later, when the consumer drove by the home, the Jetta was no longer there and he was told that the Jetta had been towed to a dealer for repair.  The consumer then learned the car was not at the dealer's, but was at a transmission repair shop, whereupon the consumer had the vehicle towed from that repair shop to a shop of his choice, which performed $2,332 in repairs to the vehicle.  The trial judge found that the defendants' testimony lacked credibility and concluded that defendants violated the New Jersey Consumer Fraud Act, specifically the Administrative Rules of the Division of Consumer Affairs applying to sales of automobiles by dealers, and the New Jersey Administrative Code governing advertisements for the sale of motor vehicles.   The trial judge awarded plaintiff treble damages pursuant to the New Jersey Consumer Fraud Act and awarded the consumer $12,478.55 in counsel fees and court costs.  On appeal, the appellate court confirmed the entry of judgment against the dealer.