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September 11, 2008
Settlement drives home message that car dealers must be ethical

Attorney General’s Office claims Eastern Washington dealerships broke consumer protection laws

WENATCHEE – The Washington State Attorney General’s Office hopes an agreement with two Eastern Washington businesses will drive home an important message to all car dealers: When encouraging buyers to sign on the dotted line, employees must play it straight.

The Attorney General’s Office announced a settlement today with Kane Automotive Group, Inc., and Wenatchee Valley Truck and Auto Outlet, Inc., which operate dealerships under the names Spokane KIA, Spokane KIA on Sprague, Spokane Suzuki and Wenatchee KIA. The companies are owned by Sidney Kane, of Wenatchee.

The agreement entered today in Douglas County Superior Court doesn’t include an admission of wrongdoing by the companies, but requires the dealerships  to comply with consumer protection laws, work to resolve consumer complaints in  good faith and pay $20,000 in attorneys’ fees and costs.

Assistant Attorney General Jack Zurlini said the state’s investigation uncovered business practices that the office alleges harmed buyers.

“Cars were repossessed and checks bounced,” Zurlini said. “Today’s settlement is a reminder that there’s a right way and a wrong way to do business. Kane Automotive has committed to comply with state consumer protection laws.”

The Attorney General’s Consumer Protection Division launched a joint investigation with the Department of Licensing into the companies’ business practices in 2006 after receiving a complaint from a consumer who said she paid for $18,700 for a new KIA Optima then discovered the car was not new. Assistant Attorney General Jack Zurlini said the car should not have been sold as new because it had been previously sold and titled to another customer. When state investigators took a closer look, they found additional alleged violations.

For example, the Attorney General’s Office alleged that the dealerships submitted false credit applications to banks by inflating salaries and lowering housing costs on customer credit applications, sometimes without the customer’s knowledge. Other times, customers were aware of the changes. As a result, at least four cars were repossessed because buyers couldn't make the payments on cars they should not have been able to buy in the first place.

Additionally, the Attorney General’s Office alleged the companies routinely failed to pay off liens on customers’ trade-ins within two business days, as required. As a result, the office alleged that customers continued to receive bills for loans on cars they no longer owned and, in some cases, were hit with bank overdraft fees.

The office also alleged the companies improperly certified customer signatures on Department of Licensing documents, failed to maintain advertising records and violated Washington’s “bushing” statute.

Assurance of Discontinuance

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Media Contacts: Kristin Alexander, Media Relations Manager – Seattle, (206) 464-6432

Jack Zurlini, Assistant Attorney General, (509) 458-3538

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