Owners of 8 N.J. Dealerships Reach $1.8M Settlement For Deceptive Practices
July 15, 2014
NEWARK, N.J. — The New Jersey Division of Consumer Affairs has reached a settlement of $1.8 million, plus consumer restitution, from eight auto dealerships and their owners. The settlement resolves an investigation into alleged deceptive sales tactics at the dealerships.
Carmelo Giuffre and Ignazio Giuffre are accused of failing to disclose existing mechanical defects or past damage to used cars; charging for supplemental warranties and other costly “after-sale items” without customers’ consent; and failing to honor the negotiated or advertised prices for vehicles.
The settlement includes Route 22 Toyota, Route 22 Honda, Route 22 Nissan, and Route 22 Kia, all located in Hillside, as well as Hackettstown Honda, Hudson Honda, Freehold Hyundai, and Freehold Chrysler Jeep. All eight dealerships are owned by Carmelo and Ignazio Giuffre.
“This settlement is a tremendous success for the consumers who were affected by the alleged deceptive sales tactics,” Acting Attorney General John J. Hoffman said. “The consequences, including a civil penalty of $1.8 million, are particularly appropriate in light of the fact that the owners of these dealerships allegedly violated an earlier settlement in which they had promised not to engage in such practices.”
The State alleged that actions by the dealerships directly violated a prior settlement that Carmelo and Igazio Giuffre reached with the state in 1999. That agreement was related to similar consumer complaints received by the state regarding the dealership's practices.
The Division of Consumer Affairs received complaints from numerous consumers who documented a host of allegations against these dealerships. In addition to bait-and-switch tactics and add-on sales without consent, consumers alleged that the dealerships failed to refund deposits in a timely manner after consumers either canceled sales or were denied financing; advertised cars without including required information such as vehicle identification numbers, thus preventing consumers from being able to check the vehicle’s history of damage and use; and failed to provide consumers with motor vehicle titles and registrations in a timely manner.
“Buying a new or used vehicle can be an intimidating process, especially for consumers who lack the ability to independently learn about a used car’s condition or history before making a decision,” Division of Consumer Affairs Acting Director Steve Lee said. “Our state laws protect all consumers by ensuring they have access to all relevant information when buying a motor vehicle. This settlement is intended to ensure that these dealerships will not again violate our laws or deceive potential customers.”
In February 1999, Carmelo and Ignazio Giuffre, as well as Route 22 Toyota, Route 22 Honda, and Route 22 Nissan entered into a settlement in which the defendants agreed to pay $450,000, including $250,000 as a compensatory fund for consumers, to settle similar complaints by consumers.
The new settlement requires a payment of $1.8 million, which includes $1,733,059 in civil penalties and $66,941 to reimburse the state’s investigative costs and attorneys’ fees.
In addition to that payment, the defendants must work to resolve the complaints of 45 consumers who documented their allegations with the Division of Consumer Affairs.
Additionally, under the settlement, the defendants must, at their own cost, hire a state-approved compliance monitor for two years. The monitor will oversee the defendants’ compliance with all applicable state and federal laws, rules, and regulations, and with the defendants’ own internal policies and procedures; will review the defendants’ policies and procedures and make any recommended changes; will facilitate the resolution of additional consumer complaints; and will provide written quarterly reports to the Division of Consumer Affairs.