Tag Archive | "fine"

Texas DMV Halts Plan to Fine Dealers with CarGurus Listings


AUSTIN, Texas — After the Texas Department of Motor Vehicles Enforcement Division took a call from shopping site CarGurus on April 30, the department hit the brakes on its plan to fine dealers who have listings on the CarGurus website. As part of an agreement reached over the phone, CarGurus must submit suggested revisions to its advertising practices, which the department will consider no later than May 7.

The DMV’s Enforcement Division announced in a letter to CarGurus and the Texas Automotive Dealers Association April 23 that it would fine dealers with listings on the shopping site $10,000 in administrative penalties each day a violation occurs. The department claims that the way CarGurus lists the prices of used vehicles on its website — including projected savings below market value and price drops — is in violation of state law.

“… A savings claim or discount offer is prohibited except to advertise a new motor vehicle,” the department’s letter, obtained by F&I and Showroom, read, in part. “No person may advertise a savings claim or discount offer on used motor vehicles.”

Now, the department is actively working with CarGurus to ensure that its advertisements are in compliance with state law and has put possible enforcement actions on hold. It will issue a decision on the proposed changes by May 7.

“In the interim, the department will abate any enforcement action relating to used motor vehicle savings claim advertisements appearing on the CarGurus website,” the department’s Director of Enforcement William P. Harbeson told CarGurus in a letter following yesterday’s call. “Again, thank you for your cooperation in this matter and I am hoping we can quickly resolve this matter in an amicable manner.”

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Texas Dealers Could Face Fines Over CarGurus’ Business Practices


AUSTIN, Texas — The Texas Department of Motor Vehicles Enforcement Division issued a cease-and-desist letter to CarGurus and the Texas Automotive Dealers Association (TADA) last week, stating that it will take enforcement action against dealerships if the automotive shopping site does not revise its advertising practices within 30 days.

At issue is the way CarGurus lists the prices of used vehicles on its website, including projected savings below market value and price drops. “… A savings claim or discount offer is prohibited except to advertise a new motor vehicle,” the DMV’s letter, obtained by F&I and Showroom, read, in part. “No person may advertise a savings claim or discount offer on used motor vehicles.”

The Texas DMV Enforcement Division says that unless CarGurus removes the “offending advertisements” within 30 days, it will take action against dealerships with inventory listed on the site to the tune of $10,000 in administrative penalties each day a violation occurs, as well as other disciplinary actions.

Industry pundits like F&I and Showroom and Auto Dealer Monthly columnist Jim Ziegler have been critical of CarGurus’ business practices, claiming, among other things, that the firm displays dealers’ inventory on its site without their knowledge.

“I personally view CarGurus as the most hostile, anti-dealer website yet,” Ziegler wrote in a June 2013 column. He also placed the blame on other lead-generating sites like Cars.com for feeding dealer inventory to CarGurus.

“Another thing I don’t like about CarGurus.com is the site rates dealers and their deals,” Ziegler wrote, in part. “Labels, from my understanding, include ‘Great,’ ‘Good,’ ‘Fair’ or ‘Bad’ dealers. What gives the site the right to do this? And what standard is it using to rate these deals?”

On Wednesday, CarGurus Director of Legal Allison Beakley contacted Texas dealers alerting them to a call between the company and the DMV’s Director of Enforcement Bill Harbeson and Corrie Alvarado, the enforcement attorney who signed the cease-and-desist letter. The call is scheduled to take place today, April 30.

“We plan to resolve this issue promptly and prior to the 30-day deadline,” Beakley wrote. “In addition, we will update you by Tuesday, May 5, of the results of our call with the Texas DMV and the status of the issue.”

A CarGurus spokesperson, who confirmed the firm works with more than 6,000 U.S. dealers and gets inventory feeds from more than 100 sources, including inventory hosts, vehicle OEMs and other third-party lead providers, said the company is working with the Texas DMV to resolve the issue.

“We are working closely with the Texas Department of Motor Vehicles on this issue, and we expect to have a resolution very soon,” read the statement the CarGurus spokesperson issued to F&I and Showroom. “Once resolved, we will communicate immediately with our dealer customers in Texas.”

Copied on the Texas DMV’s cease-and-desist letter to CarGurus was Karen Phillips, executive vice president and chief counsel for the TADA. In an interview with F&I and Showroom, she said the association won’t be involved in today’s discussion between the Texas DMV Enforcement Division and CarGurus.

“That’s between the two of them,” she said of today’s call. “I did send out the information to my membership to let them know what was going on.”

Phillips added that dealers are subject to the jurisdiction of the agency for their own advertising and if they have an agreement with CarGurus to market their inventory, but she doubted dealers would be held responsible for any advertising violations if CarGurus posted their inventory on its site without their knowledge.

“If an entity has web-scraped their information and the dealer doesn’t know about it, then I’m certain that the agency will take that into account,” she noted. “And I think that might be an issue where if I were to receive a complaint from the agency, and I could show that I had not signed up with whatever service provider that is, because I don’t have a contract with them, then I think the agency would take that into account when deciding whether or not to go forward with the complaint.”

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Feds Fine Takata $14,000 Daily for Not Cooperating


The federal government has levied a $14,000 per day fine against air bag manufacturer Takata Corp. for failing to cooperate with a safety investigation over causes for its air bag inflators rupturing, a defect that has resulted in at least four deaths in the U.S, reported Detroit Free Press.

U.S. Transportation Secretary Anthony Foxx announced the fine Friday morning at a ceremony in Richmond, Va., where he and Mark Rosekind, the head of the National Highway Traffic Safety Administration, called on Congress to pass legislation requiring rental car companies and used car dealers to fix safety defects before renting or selling vehicles subject to a recall.

The fine represent the government’s latest tactic in a clash that has been going on since 2008. The recall has expanded to cover about 17 million vehicles in the U.S., of which automakers have replaced the air bags in nearly 2 million, said NHTSA spokesman Gordon Trowbridge.

“Safety is a shared responsibility and Takata’s failure to fully cooperate with our investigation is unacceptable and will not be tolerated,” said Foxx. “For each day that Takata fails to fully cooperate with our demands, we will hit them with another fine.”

Takata said it was “surprised and disappointed” by Foxx’s action and took issue with the contention the air bag supplier had not been fully cooperative.

In December, NHTSA issued two special orders to Takata requiring the company to provide documentation and other material relating to the agency’s ongoing investigation. The agency contends Takata has not fully complied with those orders.

NHTSA has said inflators in Takata bags may rupture and explode, particularly in very humid climates, spreading metal shards that have been tied to at least five deaths in the U.S. For passenger-side air bags the recall is limited to Florida, Texas, Alabama, Mississippi and Puerto Rico.

Five automakers with driver-side Takata bags that could be at risk have expanded their recalls nationwide.

Takata said it provided NHTSA with almost 2.5 million pages of documents and has been communicating regularly with the agency. Neither Takata, the 10 automakers nor NHTSA have discovered the root cause of the malfunction.

“We continue to keep NHTSA closely informed on the extensive testing efforts we have undertaken,” the company’s statement said. “That work has, so far, supported our initial view that age and sustained exposure to heat and humidity is a common factor in the small number of inflators that have malfunctioned.”

After reports of at least one death and other injuries in non-humid regions, NHTSA in December expanded the recall nationwide for driver-side bags, but Takata has resisted. The Japanese-based supplier is conducting its own investigation led by former U.S. Transportation Secretary Samuel Skinner.

Separately, the 10 automakers who installed Takata bags have come together to hire an independent expert to investigate the cause of the malfunction. Five automakers have expanded their recalls to the entire country.

Consumers can determine if the vehicle they plan to rent or buy has an open recall that needs to be addressed by using NHTSA’s free Vehicle Identification Number (VIN) look-up tool https://vinrcl.safercar.gov/vin.

NHTSA’s Safercar mobile app on both provides users free access to key safety information, including recalls and safety performance.

In addition to imposing the fine, Foxx urged Congress to pass the Grow America Act which would extend to rental cars and used cars the existing requirement that all outstanding recalls be repaired before they are sold.

The most recent fatality related to Takata’s air bags occurred Jan. 18 in Spring, Texas, near Houston. It involved a 2002 Honda Accord, which was purchased used while under recall, but neither the previous owner nor the dealer had the air bag replaced.

The Harris County medical examiner’s preliminary report said the driver, Carlos Solis,died of blunt force injuries to the neck.

The Grow America Act would fund infrastructure projects needed to promote economic growth, and enhance safety and efficiency. It also seeks to boost NHTSA’s budget to $908 million for the fiscal year beginning Oct. 1, including increasing the agency’s defect investigation budget to $31.3 million – approximately triple the current level. It also would raise the maximum penalty NHTSA could levy for failure to report safety defects from $35 million to $300 million.

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Feds Fine Honda $70 Million for Safety Reporting Violations


DETROIT – The U.S. Department of Transportation’s National Highway Traffic Safety Administration announced Thursday Honda Motor Co. has agreed to pay $70 million for failing to report deaths, injuries and certain warranty claims to the federal government, reported MLive.

NHTSA said the Japanese automaker was in violation of the Transportation Recall Enhancement, Accountability and Documentation Act. Signed into law in 2000, the TREAD Act in part requires auto companies to report any defects, death or injuries related to their products.

The fine includes two separate, $35 million civil penalties. NHTSA said an investigation of the Japanese automaker found that it failed to submit early warning reports, which identify potential safety issues. The federal regulator said Honda did not report 1,729 death and injury claims between 2003 and 2013.

In addition to the fines, NHTSA is requiring Honda to develop written procedures for complying with requirements for early warning reports, as well as to train its relevant personnel on this front on an annual basis.

In 2014, NHTSA levied a record $126 million in civil penalties. It was more than the agency had collected over the course of its entire, 43-year history.

“Honda and all of the automakers have a safety responsibility they must live up to – no excuses,” U.S. Transportation Secretary Anthony Foxx said in a statement. “Last year alone, we issued more fines than in NHTSA’s entire history. These fines reflect the tough stance we will take against those who violate the law and fail to do their part in the mission to keep Americans safe on the road.”

NHTSA said its total fines in 2014 break down as follows:

  • Honda, $70,000,000, for failing to both submit early warning reports and warranty claims.
  • Gwinnett Place Nissan, $110,000, for failing to perform recall remedy in new motor vehicles prior to sale and delivery.
  • Ferrari S.p.A. and Ferrari North America, Inc, $3,500,000, for failing to submit early warning reports.
  • Chapman Chevrolet LLC, $50,000, for failing to perform recall remedy in new motor vehicles prior to sale and delivery.
  • Hyundai Motor America, $17,350,000, for the failure to issue a recall in a timely manner.
  • General Motors Company, $35,000,000, for the failure to issue a recall in a timely manner.
  • General Motors Company, $441,000, for failing to fully respond to Special Order by due date.
  • Prevost, a division of Volvo Group Canada, Inc; Volvo Industrial de Mexico S.A. de C.V.; and Prevost Car (US) Inc., $250,000, the second of six annual installments of a total of $1.5 million in civil penalties, for untimely recalls and untimely submission of early warning reports, and technical service bulletins (TSBs).
  • Southern Honda Powersports (a/k/a Big Red Powersports LLC), $25,000, the second of five annual installments of a total of $125, 000 in civil penalties, for the sale of unrepaired, recalled vehicles.

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Kan. Dealer Ordered to Pay Customer $2,065


LAWRENCE, Kan. — A Douglas County auto dealer has been ordered by Attorney General Derek Schmidt’s Office to repay a consumer more than $2,000 after violating the Kansas Consumer Protection Act.

South Auto Sales, Eudora, and its owner, Salah Ibrahim, were ordered last week in a consent judgment to reverse an automobile transaction and repay a consumer $2,065. In addition, the company was ordered to repay the attorney general’s office for the costs of the investigation and refrain from further violations of the Consumer Protection Act.

An investigation by the attorney general’s Consumer Protection Division found that the auto dealer required consumers purchasing an automobile on credit to sign a preprinted repossession waiver form that violated the consumers’ rights under the Kansas Uniform Consumer Credit Code and the Kansas Consumer Protection Act.

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Dealerships to Pay $175K For Deceptive Ads


Boston, MA — Four affiliated car dealerships in western Massachusetts have agreed to pay a total of $175,000 to resolve allegations that they regularly published misleading advertising, then failed to follow through on sale prices and promotions, Attorney General Martha Coakley announced Wednesday.

An assurance of discontinuance was filed Tuesday in Suffolk Superior Court. It alleges that Country Nissan in Hadley, Country Hyundai in Northampton, Northampton Volkswagen, and Patriot Buick GMC in Charlton regularly ran deceptive advertising campaigns on television, radio, dealership websites, Facebook and Twitter.

The settlement resolves allegations against the dealerships’ owners and operators Carla Cosenzi of Longmeadow and Thomas Cosenzi of West Springfield, along with their affiliated companies, Tommy-Car Management Corp., Tommy-Car Corp., Tommy Car Advertising Inc., T & C Auto Corp., Country Hyundai, Inc., and Patriot Buick GMC Inc.

“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.

According to the settlement, the AG’s Office received complaints regarding the four car dealerships’ advertising and marketing practices and initiated an investigation. The AG’s Office alleges that these dealerships engaged in a pattern of advertising that suggests bait-and-switch tactics were used to lure consumers into their showrooms with sales and promotions that were not actually available.

As part of the investigation, the AG’s Office found that the defendants allegedly refused to sell vehicles in accordance with advertised terms or conditions. This included advertising certain sales or promotions that did not disclose all necessary or usual charges, and advertising sales and promotions without clearly and conspicuously disclosing all conditions. In addition, the AG’s office alleges that the company failed to pay the advertised price for trade-in vehicles or failed to disclose other conditions on the offer.

The settlement requires defendants to pay the Commonwealth $175,000 over six months and to permanently refrain from unfair or deceptive advertising practices in the future. The Cosenzis, who deny the allegations against them, cooperated fully with the attorney general’s investigation.

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