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Tuesday, 04 August 2015 02:46

PA Bureau of Consumer Protection Goes Undercover to Investigate 109 Dealerships

Pennsylvania Attorney General Kathleen G. Kane announced on July 30 four legal settlements and a subpoena enforcement action filed as the result of two separate investigations of used car lots that were violating state automobile sales licensure laws, advertising requirements and sales regulations.

The settlements were reached in the form of assurances of voluntary compliance (AVCs) and were the result of work done by a statewide task force comprised of agents and attorneys from the Office of Attorney General's Bureau of Consumer Protection. Through July 9, the Bureau had visited 109 dealerships lots or locations statewide and reviewed more than 3,250 automobile advertisements.

The Bureau also used undercover stings, investigated consumer complaints and enforced subpoenas to detect illegal business practices. The investigation was designed to ensure a fair playing field for businesses and to help consumers feel more confident about shopping for motor vehicles.

In one investigation, agents used Craigslist and various automotive magazines to find “blind dealers," who advertise vehicles as a private sale without disclosing the dealership name and address in the advertisement. Agents' review also sought “curbstoners,” who are unlicensed motor vehicle salespeople who sell five or more vehicles in a calendar year.

Armed with this information, agents went undercover and posed as consumers interested in purchasing automobiles and came away with offers to sell automobiles from unlicensed operators, which is a violation of the law.

Additionally, as part of a separate investigation, the Bureau's agents investigated complaints concerning licensed used car dealers who were allegedly violating state auto regulations dealing with advertising and using invalid contracts that in some cases included misleading contractual provisions.

The Bureau's agents also reviewed contracts or bills of sale and repair invoices to verify compliance with Pennsylvania’s Automotive Industry Trade Practices. These regulations set forth requirements with respect to advertising new or used motor vehicles, disclosing whether or not a vehicle is “roadworthy” and how to document repair work authorization.

Below is a list of the recent legal settlements and subpoena enforcement action:

Claudia M. Charney, owner of 5th Avenue Auto Sales, and David H. Charney:

5th Avenue Auto Sales is a Cambria County car dealership that the Commonwealth alleges was engaged in the business of selling, advertising and offering for sale used motor vehicles through the use of an unlicensed salesperson. Respondent David Charney held a vehicle salespersons license that expired in 2003, but continued to sell vehicles for his wife’s dealership. The Commonwealth also alleged that the business was using contracts with invalid clauses and failed to disclose the business name and address or the word “dealer” within its advertisements. 

Under the terms of one AVC, respondent Claudia Charney, owner of 5th Avenue Auto Sales, will pay $3,000 in penalties and costs for allowing her husband to sell or negotiate the sale of motor vehicles at her dealership without a valid salesperson license and for using contracts with invalid “As is” clauses. David Charney has agreed to a separate AVC and under those terms will pay $500 in penalties and costs for failing to hold a valid vehicle salesperson license. These AVCs were filed in the Cambria County Court of Common Pleas by Deputy Attorney General Nicole R. DiTomo.

William J. Kemper:

Kemper, of York, allegedly sold, advertised and offered for sale used motor vehicles without a valid salesperson license. Kemper previously held a salesperson license, which became inactive in 2001. Additionally, it is alleged that Kemper failed to use written contracts that complied with auto regulations.

Under the terms of the AVC, Kemper will pay a $1,000 civil penalty for failing to hold a valid vehicle salesperson license and also agrees to renew his salesperson license.  This AVC was filed in the York County Court of Common Pleas by Deputy Attorney General Nicole R. DiTomo.

Below Bluebook Autos, LLC and owner Christopher Myers:

Below Bluebook Autos is a Dauphin County car dealership that allegedly misrepresented the quality of its vehicles and allegedly failed to disclose, in writing, any verbal representations made to customers. The Commonwealth also alleged in the AVC that the business failed to use proper sales contracts and failed to disclose the business name and address or the word “dealer” within its advertisements listed on Craigslist.

Below Bluebook Autos, LLC has surrendered its dealer license to the Board of Motor Vehicles and was assessed $9,758 in civil penalties and costs under the terms of this AVC. This AVC was filed in the Dauphin County Court of Common Pleas by Deputy Attorney General Nicole R. DiTomo.

Ameri Motors, Inc. and owner Jawad Al Amiri:

The Bureau of Consumer Protection filed a subpoena enforcement action against Philadelphia-based Ameri Motors, Inc. and its owner, Jawad Al Amiri, for their failure to produce certain documents and information relating to a subpoena issued by the Bureau during its investigation. The Court issued an order July 1 granting the Bureau's enforcement action, which will force the owner to produce the documents. The enforcement action was filed in the Philadelphia Court of Common Pleas by Senior Deputy Attorney General Sarah A. E. Frasch.

These AVCs and subpoena enforcement action are in addition to actions filed earlier against a Bucks County Internet warranty company , a Lawrence County used car dealer, a York County towing company and three Philadelphia used car dealers.

The Bureau of Consumer Protection also has issued 27 warnings letters this year as part of its ongoing efforts to ensure those who sell automobiles are complying with the law.

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