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
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
$18.4 Million Sexual
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
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.
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.
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
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
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.
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
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