Car dealer settles fraud case for $175K
NORTHAMPTON — Car dealership owners Carla Cosenzi and brother Thomas Cosenzi have agreed to pay $175,000 in state fines to settle allegations of deceptive advertising, according to state Attorney General Martha Coakley.
However, the pair deny wrongdoing and say they believed their advertising and marketing practices to be within the law, according to Carla Cosenzi, who is president of the dealerships and the face of their advertising campaigns.
“We always felt that what we were doing was compliant; however, it wasn’t up to the attorney general’s guidelines,” Carla Cosenzi said in a telephone interview Wednesday. “We used standard disclosure templates and a lot of standard advertising in the industry.”
After an investigation into complaints about four affiliated dealerships in Hadley, Northampton and Charlton, the attorney general’s office alleged that the Cosenzis regularly published or broadcast misleading advertising and failed to follow through on sales prices and promotions, which violated the state’s Consumer Protection Act.
The dealerships involved are Country Nissan in Hadley, Country Hyundai and Northampton Volkswagen in Northampton and Patriot Buick GMC in Charlton. They are run under Tommy-Car Management Corp., Tommy-Car Corp., Tommy Car Advertising Inc., T&C Auto Corp., Country Hyundai Inc., and Patriot Buick GMC Inc., all owned by the Cosenzis.
“We allege that these car dealers were luring consumers to their showrooms with misleading advertisements and refused to make good on the advertised sales and promotions,” Coakley said in a statement Wednesday.
Among the attorney general’s allegations outlined in a settlement agreement, filed in Suffolk Superior Court on Tuesday, the dealerships allegedly engaged in the following unfair or deceptive practices:
∎ advertising prices for motor vehicles that did not include all necessary or usual charges, such as freight, handling, vehicle preparation and document preparation;
∎ refusing to sell motor vehicles in accordance with advertised terms and conditions;
∎ advertising sales or promotions for motor vehicles without clearly and conspicuously disclosing the expiration dates as well as any other conditions;
∎ making statements in advertisements for the sale of motor vehicles that they knew or should have known were false or misleading;
∎ offering a specific price for trade-in vehicles in advertisements and failing to pay said price for all trade-in vehicles, or failing to clearly and conspicuously disclose any conditions that trade-in vehicles must have met for the dealerships to pay the advertised price;
∎ advertising that a range of prices would be paid for trade-in vehicles without clearly and conspicuously disclosing the criteria that would be used to determine any amount paid for trade-in vehicles.
According to the attorney general’s office, the Cosenzis cooperated with the investigation. The Cosenzis did not admit to wrongdoing or liability, and as part of the $175,000 settlement they were not found to have committed violations of the Consumer Protection Act. The civil penalties included paying $75,000 to the Local Consumer Aid Fund and another $100,000 to the state’s general fund within six months.
Carla Cosenzi said the investigation has led the dealerships to change their advertising and marketing practices so they are more “transparent,” as she put it Wednesday. She said the companies pulled all their advertising and corrected any future advertising as a result of the state investigation so that it meets the attorney general’s interpretation of the Consumer Protection Act.
“Anything we were doing was 100 percent unintentional and what we thought was standard automotive practice in the industry,” Carla Cosenzi said. “It has changed the way we view all our advertising prior to any publication.”
The settlement resolves the attorney general’s allegations that the dealerships regularly ran deceptive advertising campaigns on television, radio, dealership websites, Facebook and Twitter. In her statement Wednesday, Coakley’s office alleged the dealerships “engaged in a pattern of advertising that suggests bait-and-switch methods by publishing advertisements meant to entice consumers into their showrooms with sales and promotions that were not actually available.”
Under the settlement’s terms, the four car dealerships have agreed to cease and permanently refrain from nearly a dozen advertising practices, including advertising prices for motor vehicles that do not include all charges, refusing to sell motor vehicles with advertised terms or conditions and misrepresenting the price of vehicles.
They also have agreed to display all terms of advertised prices, sales or promotions “clearly and conspicuously,” and whether advertised prices relate to the purchase or lease of vehicles.
Cosenzi said the dealerships, in changing their advertising methods, have eliminated small print, for example, and are now displaying ads so that “what you see is what you get,” she said.
She said she and her brother Thomas chose to settle the case with the attorney general to avoid getting into a protracted legal battle with the state’s top prosecutor.
“We are a huge part of the community and take great pride in the community and treating all our customers fairly,” Cosenzi said.
Dan Crowley can be reached at email@example.com.