by Pennsylvania Car Dealerships Accused of Fraud
A group of car dealerships in Pennsylvania appears to have gotten off with only symbolic punishment. The state accused them of inflating car prices and manipulating loan applications. Despite the seriousness of the accusations, the state agreed to a settlement for just $130,000.
Dealers’ Reputation Problems
Due to markups, hidden fees, and other dubious practices, car dealerships have a bad reputation. However, sometimes the situation becomes so bad that the government intervenes.
Intervention by the Attorney General
This recently happened in Pennsylvania when Attorney General Dave Sunday announced a settlement with the Rosado Group, which owns numerous dealerships in the state. This includes Dickinson City Hyundai, Lehighton Kia, Performance Kia, and Milford Chrysler Dodge Jeep Ram.
Allegations of Deceptive Practices
Although the Attorney General’s office did not go into details, they claimed the company “inflated vehicle prices without customers’ knowledge and manipulated loan applications to sell more vehicles.” The state also alleged that many of their actions were violations of trade practices and consumer protection laws.
Words from the Attorney General
Many customers discovered higher final costs because the dealership masked additional expenses that they then were unwilling to remove when discovered.
This network of dealerships engaged in a pattern of deceptive practices that prioritized their own sales metrics over transparency for customers who deserve honest and fair treatment.
Settlement Terms
Unfortunately, they got off with only symbolic punishment. As part of the settlement agreement, the Rosado Group will pay $130,000 to the state, and the majority of this amount – $100,000 – is restitution for affected consumers. The remaining $30,000 appears to be a fine, which is not a serious deterrent and is unlikely to discourage other dealers from risky actions.
Company Commitments
In addition to paying the small sum, the Rosado Group will hire a compliance officer to bring their “business practices into full compliance with the law.” They have also agreed to “stricter communication regarding the condition of all vehicles sold, especially used ones, and will offer vehicles outside the manufacturer’s warranty with a 90-day powertrain warranty for 3,000 miles.” Customers can also expect greater transparency in financing matters, particularly regarding the monthly payment and loan term.
Additional Context
This situation points to a broader issue in the automotive trade, where consumers often face unfair practices. Despite the measures taken, the amount of the fine raises doubts about the effectiveness of such resolutions in combating systemic violations. Transparency in financial operations and compliance with the law remain key to restoring trust.
