By Hao Nguyen, Esq.
Senior Product and Regulatory Counsel
The Maryland Attorney General has announced the settlement of a claim brought against a Maryland dealership group alleging it had engaged in numerous practices that violated the state’s Consumer Protection Act. The lawsuit named the dealership group as well as its president and executive vice president – who were each named personally as defendants. The settlement required the group to make a payment of $3 million to the AG, as well as payment to a restitution fund that would pay thousands of purchasers over a multi-year period for the alleged overcharges. The total amount of these payments is undetermined, but could easily reach multiple millions of additional dollars.
Allegations Follow the Familiar Pattern We Have Seen In the Last Few Years
The AG’s Office accused the dealership group of various unlawful acts, including payment packing, price advertising violations, and unlawfully charging a fee equivalent to 2% of the vehicle price. In addition to the payments and restitution outlined above, the Maryland AG required the dealer group to reform its advertising practices, make additional consumer disclosures, and refrain from charging any future fees of the type outlined in the complaint.
These allegations are similar to dozens of other state and federal enforcement actions across the country against dealers just in the last few months. The areas of focus continue to be price advertising, consumer disclosures – particularly related to add-on products, payment packing, and the proper disclosure of dealer fees, along with concerns about the legitimacy of those fees.
Given the increased scrutiny of dealer practices, it is critical for dealers to take affirmative steps to:
- Maintain vigilant oversight of price advertising
- Ensure all fees and product costs are clearly disclosed, not hidden in fine print
- Train staff to avoid payment packing and properly explain product features, costs, and optional nature to customers
- Implement robust compliance tools and systems to monitor and enforce best practices
You must regularly train your staff, inspect your processes, and ensure transparency with customers. You should also be leveraging technology and industry experts to help you.
ComplyAuto Can Help
ComplyAuto has innovative tools, like the Guardian Product that will allow you to leverage ComplyAuto’s unrivaled industry expertise, along with the power of AI to monitor your advertising and F&I practices. It not only helps dealerships across the country by accurately and efficiently reviewing all dealer website VDPs and other advertisements against hundreds of compliance checks under both state and federal laws instantaneously – an industry first, it can also leverage AI to conduct deal jacket audits in a fraction of the time. Guardian combines industry expertise with artificial intelligence to provide you with the most advanced insights available today. You must monitor your ads and audit your deals to avoid unseen problems at your store. Interested dealers can reach out to us at info@complyauto.com.