An Everett auto dealership sued by the Washington State Attorney General’s Office for deceptive advertising, along with other illegal business practices, says it will change its ways. In a deal reached today, the owner of Performance Kia and the former Performance Nissan will pay $150,000 in attorneys’ fees and penalties to resolve the lawsuit.
Performance Jeep-Eagle, the business that operated Performance Kia and the former Performance Nissan, is also on the hook for another $55,000 if the business practices – violations of the Consumer Protection Act and other state laws – continue.
A 2010 lawsuit was filed after numerous consumer complaints to the Attorney General’s Office. Even while the lawsuit was pending, consumers continued to complain. One complaint described Performance Kia’s television commercials for the Kia Soul. The ads claimed the dealership was over-stocked with the compact cars supposedly marked down to$9,988, along with guaranteed trade-in values of $4,000.
But the reality, according to consumer complaints, tells a different story. One consumer complained that when they visited the dealership, none of the advertised vehicles were on the lot. Performance relied on language buried in the television ad that was “one only.” A sales associate also claimed the trade-in offer did not apply to the Kia Soul.
“I just sent a message to the dealership and said I thought their commercials are misleading and their sales tactics were bait and switch…he replied that their commercial was approved by the Attorney General,” the consumer wrote. “If you watch this commercial and still approve it, I would be very surprised.”
“We were surprised because we don’t approve television commercials – we’re not authorized to do so – and we certainly don’t approve of these kinds of sales tactics,” said Assistant Attorney General Mary Lobdell. “We also don’t approve of ads that show pictures of junkyard jalopies, suggesting the dealership will pay $2,000 for trade-ins, no matter what condition, because we know that offer is seldom honored.”
Consumers also report being the victims of misleading tactics. One consumer, who complained when the dealership did business as Performance Nissan, spoke of seeing a promotion for Nissan Altimas. “We test drove a car we liked and decided to purchase it,” he wrote in his complaint. “[T]he sales person came back and told us this particular car was not part of the promotion and it would cost $2,000 more than the advertised price. [W]e felt like it was a "bait and switch." After further negotiation, the Sales Manager said he would split the difference and sell us the car for $1,000 more.”
Selling a vehicle at a higher price than advertised is a violation of both the Revised Code of Washington andWashington Administrative Code. Today’s settlement, filed in Snohomish County Superior Court, resolves the Attorney General’s 2010 lawsuit against Performance and establishes a commitment by the dealer to revise its policies and practices. Among other conditions, Performance agrees:
· Not to run ads that suggest the dealership will match buyers’ down payments
· Not to sell a vehicle over the advertised price
· Not to engage in “false premise” advertising
· To clearly identify used vehicles in its advertising, including not using the term “previously titled”
· To advertise only those vehicles that are in its possession
· To mark unavailable vehicles as sold or withdraw advertised vehicles from publication
· Not to engage in advertising that suggests a high trade-in value for cars in disrepair
· Not to send out recall notices unless required by the manufacturer
· Not to use terms in any advertisement that state or imply a connection or endorsement by a governmental agency
· To write policies and procedures that promote lawful and ethical sales and advertising practices and to train, monitor and discipline employees appropriately.