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Global Auto Inc., an Elizabeth used car dealer, has agreed to pay former customers and the state $140,000 to settle a year-old lawsuit over its business practices, the Division of Consumer Affairs announced Tuesday.
Global Auto will pay $16,537 in restitution to seven former customers, $86,462 to the state in civil penalties, and $37,000 for reimbursement of attorneys' fees and investigative costs, under the terms of the final consent judgment filed in the Chancery Division of Union County.
Additionally, under terms of the consent judgment, Global Auto, which is not affiliated with Global Auto Mall of North Plainfield, is required to adopt and strictly follow specific business practices consistent with the state's consumer protection laws and regulations.
According to the state's seven-count civil complaint, Global Auto which has also done business as Auto Collection Group, has engaged in a host of unconscionable commercial practices since its inception in 1999.
The practices include engaging in "bait and switch" advertising tactics, where the dealership misrepresented used vehicle prices in order to attract consumers, as well as requiring consumers to sign blank documents to effect the sales transaction.According to the lawsuit, Global Auto also failed to pay off the loan balances on traded-in vehicles as promised, reported incorrect information to a lending institution in order to obtain loan financing for a consumer, improperly co-mingled sales documents with a dealership outside the state, and failed to disclose to consumers any prior damage to the vehicle being purchased.
"This settlement puts money back into the hands of consumers who are owed restitution by this dealership," state Attorney General Paula T. Dow said. "Just as importantly, Global Auto will follow good business practices going forward or we will be back to take further action."
Dow noted that $50,000 out of the $86,462 in civil penalties are suspended for a one-year period, but will become immediately due if Global Auto does not pay restitution to the seven consumers within 75 days or if the company does not abide by terms of the settlement during the one-year period. If all terms are met and no further violations occur, the $50,000 penalty will be waived.
"In today's difficult economy, used cars aren't cheap cars and used car purchasers are not second-class citizens," Acting Consumer Affairs Director Thomas R. Calcagni said. "We expect, and our state laws mandate, clear disclosure of all material facts."
Under the consent judgment, Global Auto, does not admit to any liability or wrongdoing.
Deputy Attorney General Jeffrey Koziar represented the state in case. Consumer Affairs Investigator Kelly Fennell conducted the investigation.
– TOM HESTER SR., NEWJERSEYNEWSROOM.COM
