Don Kott Ford Sued as State Opens Campaign Against Misleading Ads
In the opening shot of a campaign against misleading auto advertising, the California attorney general’s office on Thursday accused a large Ford dealer in Carson of promising the public bargains that literally were too good to be true.
In a civil lawsuit filed in Los Angeles Superior Court, the attorney general’s consumer law section said Don Kott Ford:
- Advertised 4.9% and 6.9% financing rates that were deceptively low because the prices of cars sold on credit were substantially higher than those of cars sold for cash.
- Promised the 6.9% rate on every new 1985 car, truck or van in stock when, in fact, the rate was not available on three models.
- Led the public to believe that certain used cars were actually new, and that customers could obtain discounts on 1985 cars when the reduced prices were really available only on new, 1984 models.
- Pledged to give customers a free car or truck if they found a better price at a competing dealership but never had any intention of making good on the offer.
- Suggested that customers could get a “one-half sticker price and no down payment” deal on purchased cars when the offer actually applied only to leased vehicles.
Donald G. Kott, president of the corporation that does business as Don Kott Ford, said Thursday that he had not reviewed the lawsuit and therefore could not comment on specific allegations.
However, he added: “I can say categorically in our advertising we do everything we say we’re going to do, and always have. There’s no deliberate attempt on our part to mislead anybody.”
The dealership at 21212 S. Avalon Blvd. was established 55 years ago by his father, Kott said. He described it as one of the 25 largest Ford dealerships in the nation.
The attorney general’s lawsuit also accuses Don Kott Ford of engaging in unfair business practices by making the misleading advertising claims and by pursuing other policies, including levying “excessive and unconscionable” documentary fees on lease contracts and charging customers for smog check repairs when the law says such repairs are to be made before the car is offered for sale.
The lawsuit, filed by Deputy Atty. Gen. Michael R. Botwin, asks for penalties of $500,000 each from the dealership, Donald G. Kott and other, as yet unnamed, defendants who participated in the allegedly illegal activities.
The advertising cited in the lawsuit against Kott appeared in The Times.
Botwin described the action against Kott as the first lawsuit filed since the consumer law section began looking into auto advertising claims last summer.
“It’s a statewide effort,” said Botwin, who works in the consumer section’s Los Angeles office. “It has been some time since we last took a serious look at auto advertising.”
In Los Angeles, Botwin said, “we have initiated an extensive, persistent letter-writing campaign” involving more than 50 dealers “inquiring about their ads, and in the process we’ve been educating and serving notice that the type of advertising we’ve been seeing by a number of dealers throughout the state will not be tolerated.”
Particularly troublesome, Botwin said, are ads that promise low financing rates but do not disclose that the advertised rates are subsidized by substantially higher prices on cars sold on credit. In effect, Botwin said, the difference between the cash price and credit price of a vehicle is a hidden--and illegal--finance charge.
Legal Responsibility
Botwin said his office has met recently with newspaper advertising executives, including several at The Times, to discuss their legal responsibility for ensuring that the ads their papers publish are not misleading.
Boyd Savage, The Times’ automotive advertising sales manager, said Botwin “gave us several guidelines, what you might call his ‘red flags.’ We have in turn cautioned our salespeople to alert our advertisers to these signals.
“Kott Ford has been a longtime advertiser, and to my knowledge we’ve never had any reader complaints. Kott Ford is also an advertiser in other newspapers as well as on radio and television.”
Other lawsuits are likely to follow the one filed against Kott, Botwin said. “We intend to elevate the quality of automobile advertising throughout the state, both for the benefit of consumers and legitimate competitors, who find it hard to compete with flamboyant and deceptive advertising claims.”
