So, which gum goes with Cabernet?

 

I have so many questions.

 

I was recently at a restaurant and saw a middle-aged woman chewing gum while drinking red wine. My brain did not know how to process this. (It still doesn’t…)

 

Do you choose the flavor of gum first? And then pair the wine to the gum flavor? Or is it done the other way around? Do you choose your wine first and then determine what flavor of gum will go with the wine?

 

Does that mean when you go to dinner you take all the flavors (spearmint, peppermint, wintergreen, orange)?

 

I don’t know about you, but in my brain some things just don’t go together. That said, let’s talk about something else that doesn’t go together and that is deception and car dealerships.

 

Being deceptive in any way is never in style. To be clear, deception can be an outright lie or the absence of truth.  Blacks Law Dictionary says deception is “intentional misleading by falsehood spoken or acted. Synonymous with fraud… Knowingly and willfully making a false statement or representation, express or implied, pertaining to a present or past existing fact. See also Bait and switch; Deceit; Fraud; Misrepresentation.”[1]

 

To be clear, let’s also come to an understanding about the definition of bait and switch: “A deceptive sales practice. Such tactic usually involves advertising a low-priced product to a lure customers to a store, then inducing them to buy higher-priced models by failing to stock sufficient quantities of the lower- priced item to satisfied demand, or by disparaging the less-expensive product.”[2]

 

How can you ensure this doesn’t happen at your store?

 

  • Education
  • Clear communication

 

Regulators are on the lookout for these allegations.  On June 14, 2024, Ted Smith, President of the Florida Auto Dealers Association issued a letter to Florida dealers.  Here are the highlights:

 

  • “This is to notify you that the office of the Florida Attorney General (OAG) has advised that it intends to undertake enforcement action against motor vehicle dealers in connection with their advertising. For the last 20 years, the OAG has taken a predominantly hands off approach with respect to dealer advertising. That is about to change.”
  • Ted Smith outlines six (6) deceptive practices, which includes:
    • “Burying footnoted amount of predelivery service fees so that the amounts are not readily noted.”
    • “In addition to the advertised price, requiring that the customer also pay for “advantage” or “VIP” programs or hard-adds already installed on the advertised vehicle (and not including those additional amounts in the advertised price)”
    • “Requiring a down payment or other trade equity in order to get the advertised price”
    • “Offering “trade assist” and “finance assist” discounts that do not apply to all customers”

 

Attached to the letter is a memorandum from Ashley Moody, the Florida State Attorney General.  She elaborates on four (4) “Advertisement methods that would likely be considered false or misleading by the OAG…” Two (2) examples:

 

  • “Advertisements that bold or otherwise emphasize a price that is not the actual total purchase price that would be charged to a customer, other than the amounts for state or local taxes, tag, registration and title fees, which need not be included”
  • “Advertisements that present a price and have an asterisk, footnote, or other link that discloses additional fees or charges that will be due in addition to the advertised amount…”

 

The last sentence in the letter says, “We would ask that you urge your members to take compliance with these laws seriously.” In other words, you’ve been warned.

 

If you feel that these incidents are isolated, you should reconsider your position.

 

Many dealers feel regulations will be reduced with the election of President Trump to another four years. As the Republican Party has become more populist, this may or may not be the case with the federal regulators. However, as clearly indicated here, the state attorneys general are very serious about compliance and very ambitious in their approach to ensuring adherence to state laws rules and regulations.  Many have political ambitions, as well.  Often this means they are on the hunt to cure what they perceive as problems which affect consumers.  Auto dealerships are a target.

 

Here are three (3) recent examples of dealerships being fined as a result of being deceptive.

 

As I mentioned in a previous article, on April 8, 2024, Automotive News reported Desert Toyota of Tucson, Arizona will pay $60,000 in penalties, restitution, costs and fees to settle allegations it refused to sell vehicles at advertised prices.[3] The Attorney General, Kris Mayes, said the store’s prices failed to include the full reconditioning fees the dealer charged and the cost of mandatory addition such as exterior coating and door edge guards.[4] The dealership charged reconditioning fees which exceeded the advertising.[5]

 

Also reported on April 8, 2024, New York Attorney General Letitia James fined five (5) Nissan dealerships to settle allegations of adding fees or inflating vehicle prices for consumers buying out leased vehicles.[6]

 

The attorney general’s office alleged customers reported incorrect charges and receipts from the five (5) stores when the consumers attempted to buy out their leased vehicles for the price specified in the lease. The dealerships either inflated the vehicle’s prices or “added miscellaneous ‘dealership fees’ or ‘administrative fees'” to the transactions, the agency said.[7]

 

“In some instances, customers were overcharged as much as $7,000 on an $18,000 vehicle,” the attorney general’s office said.[8]

 

“Ignoring agreements and adding bogus fees harms New York consumers, and that is something my office won’t allow to go unchallenged,” Democratic Attorney General Letitia James said in a statement. “Our investigation and settlement put money back into New Yorkers’ pockets and send a clear message that lying to New Yorkers and manipulating costs with shady tactics will not be tolerated.”[9]

 

Third, the Federal Trade Commission (FTC) and the State of Arizona Attorney General both took action against Coulter Motor Company (4 locations representing 8 franchises) for “bogus online pricing to entice consumers, tacking on thousands in junk fees, and charging Latino consumers extra.”[10]  The dealership group along with its former General Manager, Gregory Depaola, will pay $2.6 million to settle.

 

A survey of consumers who purchased or leased cars from Coulter found that 92 percent of the consumers surveyed were charged for at least one add-on without their authorization, or that they thought was required.[11]  Ninety-two (92%) is a staggering statistic.

 

There are three (3) examples of Attorney Generals who have fined dealerships for false or deceptive practices.  This trend will continue regardless of who is sitting in the White House.

 

Be careful about deception in your business practices. It can happen unintentionally, too.  For example, if there are advertised specials, ensure the sales staff knows about them and are trained on those specials.  That way, when a customer comes to the store to buy a vehicle, the sales agent doesn’t fumble around and potentially (1) miss a sale, and (2) upset a customer who may allege a bait and switch since the consumer couldn’t get the advertised price.  This can happen in any department.

 

So, there you have it.  Some things just don’t go together:

 

Starburst and syrah,

Mint and malbec,

Peppermint and port,

Birthday cake and bordeaux,

Cherry and cabernet sauvignon…

 

…and deception and dealerships.    Continually educate your staff and clearly communicate to them to ensure smooth daily transactions.

 

And that’s a flavor you’ll always savor.

 

 

 

[1] Black’s Law Dictionary, Fifth Edition.

[2] Black’s Law Dictionary, Fifth Edition.

[3] Automotive News, “Toyota dealership in Arizona will pay $60,000 to settle claims it advertised deceptive prices” by John Huetter, April 8, 2024.

[4] Automotive News, “Toyota dealership in Arizona will pay $60,000 to settle claims it advertised deceptive prices” by John Huetter, April 8, 2024.

[5] Automotive News, “Toyota dealership in Arizona will pay $60,000 to settle claims it advertised deceptive prices” by John Huetter, April 8, 2024.

[6] Automotive News, “5 Nissan dealers settle lease buyout cases with attorney general for $2 million,” by John Huetter, April 8, 2024.

[7] Automotive News, “5 Nissan dealers settle lease buyout cases with attorney general for $2 million,” by John Huetter, April 8, 2024.

[8] Automotive News, “5 Nissan dealers settle lease buyout cases with attorney general for $2 million,” by John Huetter, April 8, 2024.

[9] Automotive News, “5 Nissan dealers settle lease buyout cases with attorney general for $2 million,” by John Huetter, April 8, 2024.

[10] https://www.ftc.gov/news-events/news/press-releases/2024/08/ftc-state-arizona-take-action-against-coulter-motor-company-deceptive-pricing-discriminatory

[11] https://www.ftc.gov/news-events/news/press-releases/2024/08/ftc-state-arizona-take-action-against-coulter-motor-company-deceptive-pricing-discriminatory