Spot Delivery
"Who Is Watching Your Internet Sales Transactions?"
By Thomas B. Hudson
The old saying goes something like, "Just because you're paranoid, it doesn't mean that they aren't following you." If you're a car dealer, and you are selling cars over the Internet, there's a pretty good chance that they are following every move you make. And "they" means the Attorney General or other consumer protection folks in your state.
We've been warning for the last several years that the AGs are taking an increasingly active interest in car dealership advertising practices and that the advertising practices that they are interested in include Internet activities. We weren't surprised when a recent Pennsylvania AG press release underscored our point.
On February 8th, the Pennsylvania Attorney General's Bureau of Consumer Protection announced that it had reached a civil settlement (called an "Assurance of Voluntary Compliance" or "AVC") with LoCastro and Associates, doing business as All Pro Auto Mall, a used car dealership, concerning consumer complaints arising from the dealership's sale of vehicles on the "eBay Motors" auction website.
Attorney General Tom Corbett said that from 2004 to 2007, the Bureau of Consumer Protection received 51 consumer complaints related to eBay vehicle auctions conducted by All Pro. The complaints included disputes about the accuracy of vehicle descriptions, differences between the advertised condition and the actual condition of the vehicles, conflicting information about warranties, and the refusal to return consumer deposits for cancelled sales.
Under the AVC, All Pro must pay $6,600 in civil penalties, along with $5,000 for consumer education and future public protection services. On top of that, the AG's release noted that the dealership has already paid over $20,000 in restitution to complaining consumers. Not included in these numbers are whatever amount All Pro had to pay its own lawyers and the loss of management time dealing with the AG.
The AG said the settlement also requires All Pro to take steps to comply with Pennsylvania's Consumer Protection Law and state auto sales regulations for all future transactions. Specifically, All Pro must:
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Clearly identify vehicles being sold "as is;"
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Not extend or suggest any warranties that conflict with "as is" sales;
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Honor all warranties that are offered;
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Not sell vehicles that are unroadworthy;
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Return deposits for cancelled transactions unless consumers have agreed that those funds are non-returnable;
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Disclose the All Pro dealership name in all sales and promotional materials; and
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Notify Pennsylvania authorities of any proposed name or structure change in the company.
If you are a dealer in a state other than Pennsylvania (OK, Pennsylvania's actually a commonwealth instead of a state, but that's another article), you might think that you don't need to be concerned about the Pennsylvania AG's activities.
You'd be wrong.
First, keep in mind that we're writing about a press release. Granted, it won't get a lot of play outside of Pennsylvania and that state's immediate environs, but it is posted on the AG's website, and it will draw some attention (after all, I found it, didn't I?).
More importantly, the AGs don't operate in isolation. They meet regularly and trade war stories (you won't be far wrong if you think about their gatherings as a big 20-group meeting for the consumer protection cops).
At the next such meeting, the Pennsylvania AG will be crowing about his latest dealership enforcement trophy. The other AGs in attendance will have a lot of interest in this enforcement action and will be sure to ask for all the details.
You can bet that some of them will return to their home states and tell their folks to peruse their complaint files for eBay-related auto complaints.
That's a list where you don't want to see your dealership's name.
*Thomas B. Hudson, Esq. (tbhudson@hudco.com) is the Publisher of Spot Delivery®, a monthly legal newsletter for auto dealers, and the Editor in Chief of CARLAW®, a monthly report of legal developments in all states for the auto finance and leasing industry. He is also a partner in the Maryland office of Hudson Cook, LLP.
For more information about Thomas Hudson and Spot Delivery® go to www.spotdelivery.com
or contact: tbhudson@hudco.com
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