PRESS RELEASE FOR IMMEDIATE RELEASE
Contact: Barbara Gadbois, Deputy Attorney General
Consumer Protection Unit
Phone: (302) 577-8323
Date: May 10, 2005
MARTIN DEALERSHIPS ENTER INTO CONSENT ORDER WITH DELAWARE ATTORNEY GENERAL
Martin Newark Dealerships pay $100,000 penalty, Agree to Halt Deceptive Advertising
(Wilmington, DE): Attorney General M. Jane Brady today announced that today, Judge Charles H. Toliver, IV signed a Consent Order requiring auto dealer, Martin Newark Dealerships, which does business under the trade names "Martin Honda," "Martin Kia," "Martin Olds," and "Martin Mazda," (hereinafter "Martin"), to refrain from any advertising which violates Delaware's Consumer Protection laws. The Order is the result of an undercover investigation conducted by the Consumer Protection Unit into allegations of false advertising by Martin.
The State alleged that Martin, from February, 2003 through at least January, 2004, placed various print advertising in publications in the Wilmington area containing false claims, including:
7 Untrue representations concerning the price and financing costs of the advertised vehicles. For example, the advertised purchase price was increased by requiring trade-in allowances, cash down payments, owner loyalty manufacturer incentives and additional charges for freight.
7 Misleading advertising language regarding zero percent financing which appeared to be not available in addition to the advertised price. A consumer could get the advertised purchase price (plus certain costs) or zero percent financing but not both options.
This is not the first enforcement action against Martin. On September 12, 2000, the State filed an
enforcement action against Martin and its then General Manager, for violations of the Consumer
Fraud and Deceptive Trade Practices Acts dating from January, 1996. In that case, Martin paid a civil penalty of $20,000 and agreed that the Consent Order in that case would bind them, their agents and sales representatives.
Advertising by auto dealerships had been an area of repeated consumer complaint. To address the matter, in 1999, the Attorney General asked the Delaware Automobile and Truck Dealers Association (DATDA) to develop voluntary advertising guidelines as part of a system of industry self-regulation in Delaware. As a result of these guidelines, the quality of advertising in Delaware has improved and the guidelines can serve as a model for other states.
Although she was unaware of the details and could not comment specifically on this case, DATDA Executive Director, Marlene Lynch-Petrylak said, "our Association is highly committed to ethical and consumer-friendly business practices, and we have worked closely with the Attorney General's office to achieve this mutual goal. Integrity and ethics are paramount to Delaware dealers, and to members of our organization."
Under the new Stipulation and Consent Order, Dealer agrees to review its advertising practices and refrain from any and all false, misleading, or deceptive advertising.
Attorney General M. Jane Brady commented, "We consistently have made it clear that businesses must deal fairly and honestly with Delaware consumers. These advertising practices hurt individual consumers, other dealerships as well as effect the reputation of the automobile dealer industry. We are hopeful that this dealership will now come into and remain in compliance."
The Stipulation and Consent Order requires that Dealer pay $100,000 to the Consumer Protection Fund as penalties and $15,000 in costs to the Fund for the Attorney General's investigation.