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Car Dealership Group Settles Investigation with NJ Div. of Consumer Affairs

The owners of 8 dealerships, one of them in Freehold, will pay a civil penalty of $1.8 million, plus customer restitution, to resolve an investigation sparked by allegations of deceptive sales tactics.

An announcement from to Office of the Attorney General: 

The New Jersey Division of Consumer Affairs, represented by the Division of Law, has obtained a settlement of $1.8 million, plus consumer restitution, from eight auto dealerships and their owners, Carmelo Giuffre, of Brooklyn, New York, and Ignazio Giuffre, of Colts Neck, New Jersey.  The settlement resolves a NJ state investigation into alleged deceptive sales tactics such as failing to disclose existing mechanical defects or past damage to used cars; charging for supplemental warranties and other costly “after-sale items” without customers’ consent; and failing to honor the negotiated or advertised prices for vehicles.

The settlement includes Route 22 Auto Sales Inc., d/b/a “Route 22 Toyota,” Route 22 Automobiles Inc, d/b/a “Route 22 Honda,” Route 22 Nissan Inc. d/b/a “Route 22 Nissan,” Hillside Automotive Inc. d/b/a “Route 22 Kia,” and Hackettstown Auto Sales, Inc d/b/a “Hackettstown Honda,” all located in Hillside; Hudson Auto Sales Inc. d/b/a Hudson Honda, in West New York; and Freehold Automotive LTD, Inc. d/b/a “Freehold Hyundai” and Freehold Chrysler Jeep, Inc d/b/a “Freehold Chrysler Jeep.”  All eight dealerships are owned by Carmelo and Ignazio Giuffre.

“This settlement is a tremendous success for the consumers who were affected by the alleged deceptive sales tactics,” Acting Attorney General John J. Hoffman said in a statement.  “The consequences, including a civil penalty of $1.8 million, are particularly appropriate in light of the fact that the owners of these dealerships violated an earlier settlement in which they had promised not to engage in such practices.”

The state alleged that actions taken by the dealerships directly violated a prior settlement that Carmelo and Igazio Giuffre, and certain of the dealerships, reached with the New Jersey in 1999, after the State received very similar consumer complaints about deceptive practices by the dealerships.

The Division of Consumer Affairs received complaints from numerous consumers who documented a host of allegations against these dealerships.  In addition to the bait-and-switch tactics and add-on sales without consent, consumers alleged that the dealerships failed to refund deposits in a timely manner after consumers either canceled the sales or were denied financing; advertised cars without including required information such as vehicle identification numbers, thus preventing consumers from being able to check the vehicle’s history of damage and use; and failed to provide consumers with motor vehicle titles and registrations in a timely manner. 

“Buying a new or used vehicle can be an intimidating process, especially for consumers who lack the ability to independently learn about a used car’s condition or history before making a decision,” Division of Consumer Affairs Acting Director Steve Lee said.  “Our State laws protect all consumers by ensuring they have access to all relevant information when buying a motor vehicle.  This settlement is intended to ensure that these dealerships will not again violate our laws or deceive potential customers.”

In February 1999, Carmelo and Ignazio Giuffre, as well as Route 22 Toyota, Route 22 Honda, and Route 22 Nissan entered into a settlement in which the defendants agreed to pay $450,000, including $250,000 as a compensatory fund for consumers, resulting from similar complaints by consumers. 

The new settlement, announced today, requires a payment of $1.8 million which includes $1,733,059 in civil penalties and $66,941 to reimburse the state’s investigative costs and attorneys’ fees. 

In addition to that payment, the defendants must work to resolve the complaints of 45 consumers who documented their allegations with the Division of Consumer Affairs.  The defendants shall provide restitution or, if they dispute a consumer’s complaint and requested relief, shall notify the Division, which will refer the matter to its Alternative Dispute Resolution Unit for binding arbitration. 

Additionally, under the settlement, the defendants must, at their own cost, hire a State-approved compliance monitor for two years. The monitor will oversee the defendants’ compliance with all applicable State and federal laws, rules, and regulations, and with the defendants’ own internal policies and procedures; will review the defendants’ policies and procedures and make any recommended changes; will facilitate the resolution of additional consumer complaints; and will provide written quarterly reports to the Division of Consumer Affairs. 

Investigator Kelly Fennell, of the Office of Consumer Protection within the Division of Consumer Affairs, conducted this investigation 

Deputy Attorney General Jeffrey Koziar, of the Consumer Fraud Prosecution Section in the Division of Law, represented the state in this action.

Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file a complaint with the State Division of Consumer Affairs by visiting its website or by calling 1-800-242-5846 (toll free within New Jersey) or 973-504-6200.

 


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