N.J. Auto Dealerships Sued for Violations of Consumer Fraud Act

March 15, 2006

The Attorney General’s Office and Division of Consumer Affairs have sued a company operating car dealerships in Camden County, alleging the company violated the New Jersey Consumer Fraud Act and related regulations as well as a 2001 settlement agreement with the State.

Foulke Management Corporation, owned by Charles W. Foulke Jr., does business as “Cherry Hill Triplex” and operates Cherry Hill Dodge, Cherry Hill Jeep Eagle, Cherry Hill Kia, Cherry Hill Mitsubishi and Mt. Ephraim Chrysler/Dodge. Among other things, Foulke Management Corporation reportedly engaged in a marketing campaign with the advertising pitches “$8,000 GUARANTEED FOR YOUR TRADE,” “no credit check” and “you instantly qualify, regardless of your credit.”

The State’s complaint, filed in Superior Court in Camden County, alleges that Foulke Management Corporation violated the Consumer Fraud Act, Motor Vehicle Advertising Regulations, Used Car Lemon Law and Used Car Lemon Law Regulations as well as the provisions of the Assurance of Voluntary Compliance (“AVC”) entered into with Consumer Affairs in April 2001.

“This company allegedly advertised great deals that, in reality, were not available at its dealerships,” Attorney General Zulima Farber said. “This was a typical bait and switch operation. We will not tolerate such deceptive practices.”

Consumer Affairs has received more than 100 consumer complaints from Cherry Hill Triplex customers to date.

The alleged violations committed by Foulke Management Corporation at its dealerships include:

* Not honoring a “guaranteed” ad offer of $8,000 for each trade-in vehicle;
* Advertising that a consumer would qualify for credit, then failing to provide credit to the consumer;
* Using “bait and switch” pricing practices by planning to sell motor vehicles at a price higher than the advertised price, failing to honor the advertised price and advertising a motor vehicle that was not for sale;
* Failing to honor the advertised sales and/or lease price of a motor vehicle;
* Misrepresenting the lowest available Annual Percentage Rate (APR) on consumer loans;
* Failing to disclose that the motor vehicle had previously been damaged and that substantial repair or body work had been performed;
* Failing to disclose to consumers prior to purchase or lease that a motor vehicle had been used as a rental vehicle;
* Failing to disclose, adjacent to the motor vehicle’s advertised price, that the price includes deductions for a manufacturer’s rebate and/or dealer’s discount;
* Otherwise using small print, graphic illustrations and location to obscure material facts in its advertisements;
* Failing to maintain copies of applicable advertisements within 180 days of a sale or lease transaction; and
* Failing to submit the required Used Car Lemon Law fees and documentation.

In 2001, under the Assurance of Voluntary Compliance with Consumer Affairs, the company agreed to pay a $40,000 penalty and pledged to operate lawfully.

The State is seeking enhanced civil penalties because of Foulke Management Corporation’s alleged violation of the 2001 AVC. In addition to penalties, the State is seeking restitution for consumers, reimbursement of its costs and fees and appointment of a receiver.

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