Texas A.G. Wins Refund for Vehicle Owners

September 23, 2004

Texas Attorney General Greg Abbott has won refunds for customers of 14 large Houston-area auto dealerships as the remedy for a reported scheme that forced customers to purchase what should have been optional, add-on coupon packages.

The misleading plan designed by the dealers reportedly resulted in consumers spending an extra $200 to $450 for discount maintenance coupons on each new, used or leased vehicle purchased over several years.

Abbott made the announcement accompanied by several consumers affected by the coupon-purchase scheme.

“Most consumers spent hours negotiating sale prices with dealer representatives, only to be told upon final sale that they would be required to fork over another several hundred dollars to cover the value of these coupons,” Abbott said. “This is a deceptive practice that harmed consumers.”

All 14 auto dealers reportedly cooperated with the Attorney General’s investigation and have ceased these practices. The dealers agreed to a 180-day restitution period in which consumers who were forced to purchase coupon booklets may receive a full refund, regardless of when the purchase took place.

Consumers may request refund claim forms by going online to the Attorney General’s homepage at www.oag.state.tx.us and clicking on the link referring to this settlement and the consumer refunds.

Consumers without Internet access may call the Attorney General’s Consumer Hotline toll-free at (800) 252-8011 or call the Consumer Protection Office in Houston at (713)223-5886. Consumers will be asked to return their claim form with documentation to show they purchased the coupon plans represented by the dealers as mandatory.

According to the Attorney General’s investigation, the dealers routinely ran print and broadcast advertising without mentioning that the purchase of the coupon booklets would be a condition of any sale. Most consumers were not aware of this requirement unless they discovered it on their own or questioned the charge on the sales paperwork.

Salespeople then reportedly informed them that the purchase of the coupons was a mandatory fee on top of the final sales price. With some dealers, the preprinted fee appeared on purchase orders, which led consumers to believe the fee was required by law, like a documentation fee.

“The law requires dealers to sell vehicles at prices advertised. It does not allow for dealers to inflate that price by tacking on fees for coupons and passing this off as mandatory,” Abbott said. “Customers who were deceived are entitled to have all of that money refunded to them, and that’s what this agreement does.”

The dealerships violated numerous provisions of the Texas Deceptive Trade Practices Act in carrying out these schemes over time, although most ceased these practices after being contacted by the Attorney General.

The dealers named in the matter are:

1) Demontrond Buick Co. (14101 North Freeway)
2) Demontrond Auto Country (888 I-45 South, Conroe)
3) Demontrond Chevrolet-Oldsmobile (2800 I-45 North, Texas City)
4) Mazda-Kia of Kingwood (22565 U.S. 59 North, Kingwood)
5) Mac Haik Ford (10333 Katy Freeway)
6) Mac Haik Chevrolet (11711 Katy Freeway)
7) Bill Heard Chevrolet (13115 S.W. Freeway, Sugarland)
8) Planet Ford (20403 I-45, Spring)
9) Randall Reed Ford (19000 Eastex Freeway, Humble)
10) Toyota of Baytown (4701 I-10 East Freeway, Baytown)
11) Joe Myers Ford (16634 Northwest Freeway, U.S. 290)
12) Joe Myers Mitsubishi (16484 Northwest Freeway)
13) Joe Myers Mazda-Kia (16500 Northwest Freeway)
14) Joe Myers Toyota (19010 Northwest Freeway)

The deadline for filing a claim is March 22, 2005.

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