Whitney’s Auto Group is on the hook for $100,000 in fees and penalties after a three-year investigation by the state Attorney General’s Office into its sales and advertising practices.
As part of the settlement announced Thursday, Whitney’s acknowledged no liability for any of the claims. Whitney’s dealerships include Whitney’s Chevrolet in Montesano, Whitney’s Value Ford and Stormy’s Used Cars in Elma, and Aberdeen Honda.
Owner Stormy Glick said he was surprised when the investigation first started.
“For 90 years, we’ve been doing everything we can to comply with all the laws of the state, and we’re going to continue to do that. There were obviously some laws that we weren’t even aware of which cost us some money, mostly because of ad agencies that we thought knew the laws but turns out they didn’t,” Glick said.
“I would congratulate Whitney’s for coming forward and resolving these issues with our office,” Assistant Attorney General Mary Lobdell said. “We recognize that dealers contribute significantly to their community, especially in the Grays Harbor area, and what we want (is to ensure) Whitney’s plays fair in the marketplace, and they’ve stepped up to do that.”
The settlement makes Whitney’s responsible for $60,000 in attorney fees and a $40,000 penalty. Another $75,000 in penalties was suspended, but if the auto group has any future violations, it may be responsible for that money in addition to an enhanced penalty of $25,000 per violation.
The investigation started as a result of consumer complaints.
One consumer complained that a routine oil change revealed the car she bought from Aberdeen Honda at a Raymond tent sale had a cracked frame. That kind of thing should be caught by safety checks, Lobdell said.
Another consumer complained about a mailer from Aberdeen Honda offering two potential prizes: a Honda Civic and freshwater pearl necklace. The mailer stated that the recipient had already won. However, the consumer later learned that his winning number had to match another number posted at the dealership. Lobdell said the practice runs afoul of the state’s Promotional Advertising of Prizes Act, which requires that all material terms of a promotion be prominently included in the mailer.
More than 50 complaints against the group between 2006 and 2011 were investigated, Lobdell said. Given the resources of the office, three years is not an unusually long investigation, she added.
“In this case we had numerous sales allegations in addition to advertising issues. It’s not unusual given the resources available to use,” Lobdell said.
The terms of the settlement also hold Whitney’s to several requirements above and beyond the law, including placing prices inside or outside used vehicles at off-site sales.
The key requirements, according to the Attorney General’s Office:
• Disclose known facts about a vehicle’s condition, including information about the mechanical or frame condition of the vehicle or the vehicle’s warranty.
• Comply with the Promotional Advertising of Prizes Act by, for example, disclosing material restrictions in the immediate proximity and same page where the prize is listed.
• Stop deceptive advertising practices, including making statements that imply false savings to consumers, including offering a percentage off the manufacturer’s suggested retail price for used vehicles.
• Not make any false, deceptive, or misleading statement to a lender for the purpose of obtaining a loan for a vehicle buyer.
• Sell vehicles at the advertised price.
• Disclose the price of the vehicle upon request.
Glick said his dealerships all work hard to ensure the safety and reliability of the more than 1,000 cars they buy each year, and more than anything want to get back to taking care of their customers and employees.
“We’re just a small business, and for us to continue to litigate this with the Attorney General’s office is not cost effective. When you’re small like us, (with) over 100 employees that need their jobs, to keep spending money on attorneys to go through all these motions is economically devastating,” Glick said.
The $100,000 will be paid in installments over the next three years, and Glick says he doesn’t anticipate any layoffs or cutbacks as a result.
“They’re aware of the financial situation in Grays Harbor,” Glick said of the Attorney General’s Office.
Lobdell said oversight of the agreement will come from reviews of consumer complaints.
“We monitor complaints from consumers, and when we see a trend or some significant violation, we have the option of opening an investigation,” she said.
For general questions about consumer protection laws or issues, the office has a consumer line at 1-800-692-5082.
Consumer complaints can be filed online at www.atg.wa.gov, or by phone between 10 a.m. and 3 p.m. Monday through Friday at 1-800-551-4636.