Two Oxnard car dealerships agreed Wednesday to pay $30,000 to settle a district attorney’s lawsuit alleging a variety of false advertising claims, including promising customers they would not be turned down for financing even if they had bad credit.
The civil lawsuit against Pacific Coast Ford and Pacific Coast Nissan also alleged that the dealerships falsely promised to pay off whatever was owed on a trade-in car, regardless of the amount, and made unsubstantiated claims of having the largest inventory of used cars anywhere and having the lowest prices.
Without admitting any wrongdoing, the dealerships agreed to pay the $30,000 in penalties and be placed under a court order not to commit unlawful conduct in the future. Also agreeing to the settlement was lawsuit defendant Pacific Coast Motors, a financing company established by the dealerships for customers with poor credit records.
The businesses, all on Oxnard Boulevard, are three separate corporations headed by the same president, Michael H. Wallace.
Deputy Dist. Atty. Michael D. Schwartz said the Department of Motor Vehicles began looking at the dealerships in March, 1992, after one of its investigators got an advertisement in the mail that claimed that Pacific Coast Ford had the largest inventory and lowest prices.
The law does not allow such claims unless a survey is done to prove them, the prosecutor said.
Later, Schwartz said, at least one consumer filed a complaint because the dealers would not pay off what he owed on a car he wanted to trade in.
“There was a large variety of different problems with the ads,” Schwartz said. “The DMV would talk to them about one problem, then another problem would arise.”
He said the ads ran in newspapers, on the radio and in specialty magazines that advertise cars for sale.
Kent M. Kellegrew, the attorney for the dealerships and Pacific Coast Motors, said he disagrees with the characterization that the businesses engaged in false advertising.
Many of the problems arose from technical violations, Kellegrew said. As for the ad involving trade-in cars, that was a mistake, he said.
“The ad shouldn’t have said that we would pay off any trade-in, regardless of what was owed,” Kellegrew said.
The advertisement was pulled after the mistake was discovered, he said.
Kellegrew said the businesses agreed to settle the lawsuit with the district attorney’s office to avoid the costs of lengthy litigation.
Schwartz said the dealerships ran advertisements saying customers would not be turned down for financing even if they had bad credit. However, in the very same advertisements were the initials O.A.C., which stands for “On Approved Credit,” Schwartz said.
“The advertisement itself makes it clear they did care about (bad) credit,” he said.
Kellegrew conceded that customers had to go through a screening process before credit would be approved. However, he added that Pacific Coast Motors was specifically set up to help people with bad credit.
Schwartz said his office received no complaints from people who said they were turned down for credit at the dealerships.