Misleading Ads Charged : Car Dealer Pays $75,000 to Settle Lawsuit by D.A.
A Kearny Mesa auto dealer Friday agreed to pay $75,000 to settle a civil suit filed by the district attorney’s office over alleged misleading advertising and sales practices.
The Superior Court suit alleged that the dealership was advertising that cars would be sold for $1 over invoice, but 75 were not.
Donald Canning, a spokesman for the DA’s office, said a former employee of Kearny Mesa Ford, 7303 Clairemont Blvd., reported the alleged false sales and advertising to the state Department of Motor Vehicles.
Handled by Fraud Division
The results of the DMV investigation were turned over to the DA’s Fraud Division, which probed the dealership further, Canning said. The investigation covered five “$1-over-invoice” sales periods from November, 1987, through March, 1988. During that time, 123 cars were sold and of that, 75 weren’t sold as advertised, Canning said.
Although some of the “$1-over-invoice” ads that ran pertained to certain types and models of vehicles, the ads running from Dec. 26, 1987, through Jan. 6, 1988, applied to all vehicles. But several customers who purchased vehicles during that period were told that the advertisement didn’t apply to the model or type they wanted, he said.
The amount of overcharging above the advertised price varied from as little as $13 to as much as $3,400, Canning said.
J. Clifford Johnson, general manager of Kearny Mesa Ford, said there had been a mix-up in communication between the sales and advertising departments, but it has since been corrected.
Managers Gone
“Those managers are no longer employed here,” Johnson said. “We’ve made full restitution, including interest. This happened nine months ago and, since then, we have totally revamped our policy--this car dealership is still the best place as far as conforming to DMV regulations.”
As part of the settlement, the dealership, owned by Empire Motors of San Diego, agreed to stop running misleading advertising and will sell cars at advertised prices whether or not the customer knows of the sale, Canning said.
The dealership will pay $68,000 in civil penalties to San Diego County and $7,000 to cover the DMV’s investigation costs.
The company also has voluntarily begun to reimburse customers who paid more than was advertised.
