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Jim Davis, Editor
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Published: Thursday, November 15, 2012

Update: Dealer settles lawsuit claiming misleading ads

EVERETT -- An Everett auto dealership has settled a lawsuit filed by the state Attorney General's Office based on complaints from customers that the business engaged in deceptive advertising and sales practices.

The 2010 lawsuit alleged that the owner of Performance Kia and the former Performance Nissan used misleading ads to attract customers, selling vehicles at a higher price than advertised, and made misrepresentations during negotiations.

Without admitting guilt, the owner on Thursday agreed to pay $150,000 in attorneys' fees and penalties to resolve the lawsuit, according to a statement issued by the state Attorney General's Office. Performance Jeep-Eagle, the business that operated Performance Kia and Performance Nissan, will have to pay another $55,000 if the company violates the Consumer Protection Act and other state laws, according to the statement.

The dealership later issued its own news release, criticizing the attorney general's:

"We were ready to go to trial as we felt we would prevail, but agreed to settle the dispute in order to avoid the high cost of litigation and the uncertainties inherent in any trial. The agreement does not contain any admission of violation of any law, nor does it represent agreement with any of the allegations made by the Attorney General's office. In fact, we absolutely and flatly deny that any laws were violated. We continue to operate our business as we always have…in an ethical manner, compliant with the laws of the State of Washington.

"This is reflected with the Attorney General dropping many of its original allegations including "packing" and 'bait and switch,' neither of which is contained within the consent decree. We are surprised by the press release by the Attorney General's office as it is not representative of with the tone or substance of our settlement discussions with them and contains innuendo an inaccuracies we feel are inappropriate."When the lawsuit was filed in 2010, an attorney for the dealership said it stemmed from unethical conduct by a former employee who had been fired. The lawsuit cited incidents that occurred from 2006 to 2009.

Consumers filed complaints about television commercials and print advertising that, in one example, claimed the dealership was over-stocked with cars marked down to $9,888, along with a guaranteed $4,000 for trade-in vehicles. Some of those ads appeared in The Herald.

One consumer told authorities that none of the advertised vehicles were on the lot and the company relied on language buried in the ad that noted that there was "one only."

The consumer complained to the dealership and was told that the commercial had been approved by the state Attorney General.

"We were surprised because we don't approve television commercials," assistant attorney general Mary Lobdell said in a news release. "We're not authorized to do so and we certainly don't approve these kinds of sales tactics."

Selling a vehicle at a higher price than advertised is a violation of state law.

As part of the settlement, the owner has agreed to meet numerous conditions, including only advertising vehicles the business possesses and not selling a vehicle for more than the advertised price. Additionally, the company agreed to clearly identify used vehicles in advertising and not engage in advertising that suggests a high trade-in value for cars in disrepair.