2 Toyota Dealerships to Pay $2-Million Settlement
Two Southern California Toyota dealerships agreed Thursday to pay a total of $2 million to settle a civil suit accusing them of false advertising and unfair sales practices.
The civil charges were brought against South Bay Toyota of Gardena, South Coast Toyota of Costa Mesa and the former president of the two dealerships, Shigeyasu “Steve” Hiraiwa, by the California attorney general’s office and the district attorneys of Los Angeles and Orange counties.
For the record:
12:00 a.m. Aug. 11, 2001 FOR THE RECORD
Los Angeles Times Saturday August 11, 2001 Home Edition Part A Part A Page 2 A2 Desk 2 inches; 65 words Type of Material: Correction
Car dealerships--A headline Friday incorrectly described one of two car dealerships accused of unfair sales practices and false advertising. The dealership was South Bay Toyota of Gardena, not South Gate. Both dealerships have changed hands since the alleged practices occurred. Because of an editing error, the story also incorrectly said that the former president of the dealerships and his attorney could be reached for comment. They could not be reached.
Hiraiwa and his attorney could be reached Thursday. The dealerships have since changed hands.
Jane Robison, a spokeswoman for the Los Angeles County district attorney’s office, said $1.5 million of the settlement will be distributed to about 400 customers. The remainder will be used for civil penalties and attorney fees.
The suit, filed in Los Angeles Superior Court, accused the dealerships of switching customers from financed purchases to leases without their knowledge and adding accessories to the prices of cars without the buyers’ consent.
The suit also charged that when customers tried to buy advertised vehicles, salespeople added new conditions that were not included in the promotions, such as requiring the customer to finance the vehicle through the dealership or to purchase additional services.
Robison said these practices occurred from August 1996 through February 2001 when Hiraiwa owned the dealerships.
Since then, they have been purchased by David Wilson, owner of Toyota of Orange. David Ortiz, vice president and general manager, said Thursday that the dealerships are under new management. He said none of the salespeople or managers associated with the alleged practices remain at the dealerships.
