Authorities go after crooked car deals in national crackdown
WASHINGTON - A nationwide crackdown on auto dealers, including one in New Jersey, has turned up widespread evidence of false ads, deceptive loans, and fake odometer readings, the government said Thursday.
WASHINGTON - A nationwide crackdown on auto dealers, including one in New Jersey, has turned up widespread evidence of false ads, deceptive loans, and fake odometer readings, the government said Thursday.
The investigation led by the Federal Trade Commission and law enforcement resulted in 252 enforcement actions and $2.6 million in consumer refunds and fees.
It was the second time that the FTC has gone after the car industry. Last year, the agency announced 10 cases of deceptive advertising and loans. Officials say the more recent investigation in the United States and Canada involved the Justice Department and state prosecutors.
"The clear message is that across this country, and indeed internationally, law enforcement agencies are on the lookout for deceptive and illegal practices by auto dealers, and will take whatever action is necessary to protect consumers," said Jessica Rich, director of the FTC's Bureau of Consumer Protection.
In one case, a company called the National Payment Network Inc., in San Mateo, Calif., set up car buyers with an automated payment program that was pitched as a way to save money.
But regulators said the fees associated with the program were so heavy they canceled out any savings. For example, a standard five-year auto loan would charge $775 in fees.
Matt Blatt dealerships, which have locations in Glassboro and Egg Harbor Township, N.J., worked with National Payment Network to sell loans and received commission for the more than 1,000 consumers they enrolled, according to the FTC.
As part of a settlement, National Payment Network will refund $1.5 million to consumers and waive $949,000 in fees to current customers. Matt Blatt Inc. and Glassboro Imports L.L.C. will pay $184,000.
Both companies on Thursday denied any wrongdoing. Matt Blatt Inc. believed it had clearly explained the terms and benefits of the payment program in question but agreed to settle with the FTC to avoid "protracted and expensive litigation," according to a company statement released Thursday.
Likewise, National Payment Network said it "strongly disagrees" with the FTC and presented "considerable evidence, including consumer satisfaction surveys, training materials for dealership personnel and other documents that support its position and demonstrate the value" of the payment programs in question.
"NPN has decided, however, that a settlement is in the best interest of its customers and auto dealer channel partners," the company wrote in an e-mailed statement.
A complete list of the 252 enforcement actions can be found online at