Auto Dealership
Legal Compliance Solutions & Training

Workplace Harassment
Bait & Switch Advertising
Failure To Sell At Advertised Prices
Finance Disclosures
False & Misleading Advertising
Failure To Post Buyers Guides
Improperly Completed Buyers Guide
Hidden Finance Charges
Forms Execution
Unfair & Deceptive Practices
F&I Product Price Gouging
Power Booking
Hostile Work Environment
Negative Equity/Overallowance
Sub-Prime Aquistition Fees
Rebate Administration
Payment Packing
Re-written Contracts/Backdating
Improper Contract Rescissions
Yo-Yo Financing
Untimely Rescission Notices
Improper Repossessions
Adverse Action Notices
Single Document Rule Violations
Undisclosed Deferred Down Payments
Improper Or Missing Addendums
Odometer Fraud
Branded Titles
Foreign Language Translations
Used Vehicle History Disclosures
Falsified Credit Applications
Wrongful Access Of Credit Reports
Fraud Issues
Concealing Material Facts
Straw Purchases
Signs & Vehicle Labels
Improper Use Of Dealer Plates
Certified Used Vehicle Documentation
Overcharging Fees
IRS Cash Reporting
OFAC Requirements
Information Safeguards
Privacy Notices
Identity Theft
Do-Not-Call Violations
Lemon Law
Express & Implied Warranties




These types of violations can easily cause your dealership to become a target of investigation and lead to lawsuits, regulatory action and potentially allow attorneys and regulators to gain access to your files. Who knows what else they might find?

If you think your dealership is not at risk, you may want to check out these recent cases and news stories...

Seven former senior managers at a Chevrolet dealership were convicted of defrauding their customers. The indictment alleged the seven committed 111 “overt acts” of defrauding customers by overcharging them for theft-protection packages and subsequent attempts to cover up illegal practices. The dealership also paid restitution in the amount of $2.1 million. 

Dealer Advertising Violations

A jury returned a guilty verdict in a lawsuit brought by a consumer against a dealership that engaged in false, misleading, and deceptive acts that was a producing cause of damages to the consumer. The jury also returned a total verdict of over $140,000 between the two defendants.

$18.4 Million Sexual Harassment Verdict

A Colorado dealership recently agreed to a $1.5 million settlement for gender and age discrimination. The consent decree also requires the company to put training in place for its managers and employees. "Sexual harassment and sex discrimination against women in traditionally male-dominated industries, such as the auto industry, are still unfortunate realities," EEOC acting Chairman Stuart Ishimaru said in a statement. "Likewise, older workers continue to experience age discrimination, despite their experience, productivity and qualifications."

Dealer Employees Charged With Fraud

A dealer agreed to an injunction and a payment of more than $650,000 in monetary relief as settlement of a deceptive practices civil lawsuit filed by the District Attorney’s Consumer Protection Division.  It was alleged that there were misrepresentations of charges for aftermarket products including key chains, logo pens, theft-etch services and warranty programs.  As a result,  large undisclosed charges were built into transactions.

Felony charges were brought against three former car salesmen accused of stealing from customers by persuading them to lease, rather than buy, vehicles at higher costs.  Misrepresentations, including the amount of monthly payments in a purchase, were made to consumers who wanted to buy vehicles in order to steer them to the higher-cost lease agreement.  All were arrested by DMV investigators and charged with four counts each of grand theft of personal property.

Dealership Sued By State

A dealership was ordered to pay $6.9 million to resolve a class-action suit.  According to the lead plaintiff, the dealer charged $199 for etch that she didn’t request.  She also claimed that there were other things that had been “concealed” in her sales contract, such as rust-proofing, paint sealant, and fabric protection. The plaintiff’s lawyers were awarded $3 million in attorneys’ fees and $431,700 for expenses.

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Customers purchased what they thought was a "new" car from a dealership.  Although they were told that the car was new, in actuality it had been previously sold to another consumer, and under the law had to be sold as used rather than new.  The customers obtained a settlement over $150,000.

 Attorney General Warns of "YO-YO" Financing" Scam

A class action case was brought against another dealership for failing to tell consumers that the cars they were buying had previously been used as rental cars.  The dealership also altered documents after the customer had bought her vehicle to make it appear as though she had been told that the car she was buying was a prior rental car.  The customer obtained a substantial settlement based on her individual claims, as well as $1,000 each to other consumers who bought rental cars without disclosure. Other groups of consumers also received payments.

A customer purchased a Ford Mustang from a dealership.  The customer alleged that the dealer "packed" him with accessories such as GAP Insurance, a service contract, and an alarm system, in part because the transaction was negotiated in Spanish and the customer was not given a Spanish translation of the contract as required by law.  The dealer also had the customer enter into a second contract in which they increased his Annual Percentage Rate ("APR"), monthly payment, and the cost of the same service contract he purchased in the first contract.  The increase in the service contract was an illegal finance charge.  Based on all of these claims, a settlement was obtained that included a repurchase of his Mustang, plus a $67,000 payment to him.

Car Dealer Complaints

The U.S. Equal Employment Opportunity Commission  and  an auto dealer settled a sexual harassment lawsuit brought on behalf of five former female workers. The commission announced that the dealership agreed to pay the women $375,000, without admitting wrongdoing.  The commission alleged that young female workers at the dealership suffered "touching, grabbing, slapping, offensive language, and other physical and verbal abuse.  One employee said a co-worker pulled her dress down in front of a customer while other women alleged they endured repeated propositioning as well as lewd comments from fellow staffers.  Under the settlement, the dealership also agreed to provide sexual harassment training and to revise its harassment policies.

Sexual Harassment - The Today Show

The EEOC has filed a sexual harassment, race discrimination and retaliation lawsuit against an auto dealer.  The lawsuit alleges the dealership ignored complaints about a manager who sexually harassed three female employees.  The EEOC says a service manager also verbally abused another employee, the only African-American woman in the service department.  

Female employees at an auto group were subjected to a sexually hostile work environment that included nude photos of women hanging up in the workplace, according to a lawsuit filed by the U.S. Equal Employment Opportunity Commission. 

EEOC On Harassment

Hispanic and African-American employees were allowed to pursue hostile environment claims on the basis of race and/or national origin discrimination when they were subjected to ethnic and racial slurs.

An employer’s harassment policy was found to be inadequate because it recognized only harassment based upon sexual advances and propositions, and not harassment based upon gender. 

An employee stated a claim for religious harassment when her supervisor criticized and berated her for her lack of availability on her religious holiday and made derogatory statements to her about her faith.

A court allowed a disability hostile environment claim by an employee whose supervisor taunted him about his disability, required him to perform work beyond his physical limitations and called him various derogatory names related to his disability. 

A court refused to dismiss a case before trial, holding that a jury should decide whether age was a factor in an employee’s termination.  The court cited the fact that a supervisor referred to the employee as “old man” and frequently referred to his aging appearance.

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The material provided in this website is for informational purposes only and is solely intended to provide an overview of legal compliance issues relative to automotive dealerships. Dealer Compliance Consultants, Inc. is not a law firm and the information contained in this website is not to be considered legal advice. Dealer Compliance Consultants, Inc. assumes no liability whatsoever for the use of information contained in this website.
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